Bitcoin 1 month old supply is down to historic lows

On-chain data shows that the percentage of Bitcoin supply between one week and one month old has now dropped to the historic bottom zone.

Only 3.8% of the total Bitcoin supply is now in the 1 week to 1 month old bracket

As pointed out by an analyst in a CryptoQuant post, short-term buying seems to have slowed down in the BTC market recently.

One way to calculate the capitalization of Bitcoin is “realized caps”, where each coin is multiplied by the price it was last moved to, and then a sum is taken for the entire supply.

This is different from the normal market value, where the sum is taken after all the coins are simply weighted against the current value of BTC.

The indicator of relevance here is “realized cap UTXO age bands”, which tells us about the individual percentage contribution to the realized cap from the different age bands of coins in the market.

In this case, the percentage of “1 week to 1 month old” supply is specifically considered. Here is the chart showing the trend in the contribution of this group:

The value of the metric seems to have gone down in recent weeks | Source: CryptoQuant

As you can see in the graph above, bottoms in the price of Bitcoin have historically occurred around when the percentage of the 1 week to 1 month old supply has dropped below the 4% mark.

Recently, the indicator’s value has observed a decline and is now at around 3.8%, below this historical threshold.

Kvanten explains in the post that when bears have just started, investors continue to buy without realizing that a bear market is underway. But when the bear has lasted long, most of these holders stop buying more.

The 1 week to 1 month old supply means the short term purchase that takes place in the market. Falling to these lows suggests that the bear is now at a stage where most investors have stopped accumulating more.

If the previous trend holds this time as well, the percentage of this supply going down into the bottom zone could mean that Bitcoin could be at or near a bearish bottom for the cycle.

BTC price

At the time of writing, Bitcoin’s price is hovering around $21.8k, up 1% in the past week. Over the past month, the crypto has increased by 2% in value.

The chart below shows the trend in the price of the coin over the last five days.

Looks like BTC has continued to be rangebound in the last few days | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com