On-chain data shows that long-term Bitcoin holders continue to hold strength in the near term as their exchange inflows remain low.
Bitcoin long-term holder supply hits all-time high
“Long-term holders” (LTH) are all investors who have held their tokens since 155 days ago. In general, the longer holders keep their tokens dormant, the less likely they are to transfer or sell them at any point. As a result, LTHs are generally the most persistent group in the industry.
Whether the market is experiencing FUD or a profit-taking opportunity, these investors tend to be quiet and not take much action. Their resilience has also earned them the common nickname of “diamond hands.”
The timing of when these investors eventually sell is therefore all the more important as they show that the market is able to push even these determined holders.
A few days ago, Bitcoin experienced a massive crash, with the price dropping to the $26,000 level. In its latest weekly report, on-chain analytics firm Glassnode investigated whether BTC LTH showed any reaction to the cryptocurrency’s plunging value.
There are two relevant metrics here: LTH supply and LTH transaction inflow. The former measures the total assets these investors currently hold in their wallets. Meanwhile, the latter metric tracks transactions sent by the group to exchanges.
The chart below shows the trend of these two BTC metrics over the past few years:
Looks like the value of the metric has been relatively low in recent days | Source: Glassnode's The Week Onchain - Week 34, 2023
Bitcoin LTH transaction inflows are shown as a percentage of its supply. The chart shows that this group has only continued to send negligible amounts of supply to exchanges recently.
Typically, holders use centralized exchanges when they want to sell. So the fact that these investors didn’t deposit money with these platforms suggests that they didn’t have much of a hand in the crash, and that the crash happened without panicking them.
As can be seen from the graph, not only is there no sale of LTH, but its supply has continued to grow recently. The caveat here is that this is not a sign that buying is happening now, but that the supply growth is a result of investors who bought 155 days ago finally maturing into the group.
With the latest increase, the Bitcoin LTH supply has hit a new all-time high. LTH didn’t seem to care about the accident, as the team has become the strongest ever.
As of this writing, Bitcoin is trading around $26,000, down 11% over the last week.
BTC hasn't moved much since the crash | Source: BTCUSD on TradingView
Featured image via Kanchanara on Unsplash.com, charts via TradingView.com, Glassnode.com