Supply of long-term holder of bitcoin takes back ATH, reversal of conviction?
Data shows that the supply of Bitcoin long-term holders has climbed back up and set a new all-time high, suggesting that conviction may be returning to the market.
Supply of long-term bitcoin holder recovers after FTX panic selling
According to the latest weekly report from Glassnode, BTC long-term owners now hold around 72.3% of the total circulating supply. The “long-term holder” (LTH) group is one of the two major groups in the Bitcoin market and includes all investors who have held their coins for at least 155 days since, without moving or selling them from their wallets.
Related Reading: Bitcoin NVT Golden Cross Still in ‘Overbought’ Region, Volatility to Follow?
“Short-term holders” (STHs) make up the other side of the market. Statistically, the longer investors hold their coins, the less likely they are to sell at any time. Therefore, LTHs are the more resolute group of the two and are sometimes called the “diamond hands” of the market.
The “LTH supply” is an indicator that measures the total amount of BTC that these HODLers as a whole currently have in their wallets. Here is a chart showing the trend in this calculation over the last few years:
Looks like the value of this metric has seen an increase in recent days | Source: Glassnode's The Week Onchain - Week 50, 2022
As the graph above shows, the Bitcoin LTHs showed a strong accumulation trend between July and early November, causing their supply to reach a new high. However, the crash due to the collapse of the crypto exchange FTX completely reversed the trend as these holders quickly began shedding their holdings instead.
This decline in the indicator suggests that the crash caused even these resolute holders to panic and sell their coins. But in recent weeks, the tide has again seemed to have shifted. As the market has been trading sideways, LTH supply has seen a steady increase, suggesting that these investors are back into accumulation.
The metric has now completed its pullback due to the FTX debacle and has set a new all-time high of 13.9 million BTC, equivalent to approximately 72.3% of the total circulating supply.
The 155-day threshold would place the source of this new streak of accumulation back in June and July of this year, which is when the repayment event due to the 3AC collapse took place.
This new surge in LTH supply means that conviction is returning among these Bitcoin HODLers, which has historically been bullish for the price over the long term.
BTC seems to have bounced back from yesterday's fall | Source: BTCUSD on TradingView
At the time of writing, Bitcoin’s price is trading around $17.2k, up 1% in the last week.
