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Bitcoin’s long-term holders are defined as addresses that have maintained their Bitcoin for over 155 days. Although 155 days may not seem extensive in the context of Bitcoin, addresses that have retained their assets for a longer duration statistically exhibit a lower likelihood of selling their BTC.
Consequently, the actions and choices of this specific group can greatly impact the cryptocurrency market and the price trajectory of Bitcoin. Historically, long-term holders have demonstrated resilience during Bitcoin’s price fluctuations, frequently retaining their assets during downturns and liquidating during peaks.
Recently, Bitcoin’s price has displayed a relatively stable trading pattern, lingering around the $26,200 level after recovering its $26,000 support just last week. This stabilization follows a turbulent month, during which Bitcoin’s price fell to lows of $25,000, contrasting sharply with the previous months of sideways movement between $29,000 and $30,000.
Graph illustrating Bitcoin’s price from June 2023 to September 2023 (Source: CryptoSlate BTC)
Despite the price volatility, the Bitcoin supply held by long-term holders has reached an all-time high.
Graph depicting the total supply held by long-term holders from 2010 to 2023 (Source: Glassnode)
The long-term holder supply currently amounts to 14.83 million BTC. Since the start of 2023, this supply has increased by 757,177 BTC. Over the past year, it has expanded by 1.07 million BTC, with 152,216 BTC added in just the last 30 days.
Graph showing the total supply held by long-term holders from September 2022 to September 2023 (Source: Glassnode)
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This increase in long-term holder supply highlights these holders’ confidence in Bitcoin’s long-term prospects. Even amid price fluctuations, their readiness to hold indicates a belief in the cryptocurrency’s lasting value. Furthermore, with such a substantial portion of Bitcoin’s supply being held long-term, there is decreased liquidity in the market, which may lead to heightened price volatility.
At present, the long-term holder supply represents an impressive 76.09% of Bitcoin’s circulating supply. The last time this percentage was exceeded was in August 2015, when it briefly surpassed 76%. This suggests that the majority of Bitcoin’s circulating supply is now controlled by those who trust in its long-term value proposition.
Graph illustrating the percentage of Bitcoin’s circulating supply held by long-term holders from 2014 to 2023 (Source: Glassnode)
The realized price for long-term holders and the MVRV ratio provide additional insights. The realized price is the average price of the Bitcoin supply held by long-term holders, calculated based on the last transaction date of each coin on-chain. It is often regarded as this group’s ‘on-chain cost basis.’ Data from Glassnode indicates that the realized price for long-term holders is currently $20,599. This figure has decreased since November 2022, when it was recorded at $23,500.
The MVRV ratio, conversely, measures the market value (spot price) in relation to the realized value (realized price) for the long-term holder group. An MVRV ratio of 1.311, as it currently stands, indicates that the present price is 31.1% above the average cost basis for long-term holders.
Graph showing the realized price and MVRV ratio for long-term holders from July 2022 to September 2023 (Source: Glassnode)
These metrics suggest that a considerable portion of Bitcoin’s supply is presently in profit. The MVRV ratio, in particular, can serve as a useful tool for assessing market sentiment. Extremely high or low values can indicate periods where the market is either overheated or undervalued.
The increase in Bitcoin’s long-term holder supply, along with insights from on-chain metrics, illustrates a market that remains optimistic about Bitcoin’s future. While price volatility is inherent in the cryptocurrency space, the commitment of long-term holders indicates a sustained belief in Bitcoin’s long-term potential.
The post Record highs in Bitcoin’s long-term holder supply signal market confidence appeared first on CryptoSlate.
