In a bullish crypto market, it is common for long-term holders (LTHs) to sell their Bitcoin as prices surge. This trend was particularly noticeable from early 2024 until April. According to CryptoQuant, the supply held in 1-year and 2-year-old unspent transaction outputs (UTXOs) saw significant declines. However, despite the selling pressure on these UTXOs, the Bitcoin supply in UTXOs older than three years continues to grow. This indicates heightened long-term optimism among these holders.
Over 50% of Bitcoin Supply Inactive for a Year, Indicating Long-Term Confidence
For over a year, more than 50% of the entire Bitcoin supply has remained inactive on-chain, highlighting the strong long-term value perception held by those who hold onto it. This indicates that these holders are confident in retaining their Bitcoins rather than selling them amidst market fluctuations, signaling their belief in Bitcoin’s potential for sustained growth over time.
Recently having dipped to $56k, Bitcoin is now recovering its price, prompting a shift in behavior among holders. Those who have held their Bitcoins for at least one or two years are refraining from selling. This shift from distribution to accumulation phases suggests renewed confidence among these groups in future BTC prices. Consequently, they prefer to retain their assets rather than converting them into fiat currency at current rates.
Bitcoin Holders Demonstrate Confidence as Key Support Levels Are Tested
The current technical outlook for Bitcoin is pivotal, with prices testing crucial support levels. Behavior among long-term holders and other on-chain metrics indicate strong underlying bullish sentiment. However, breaching the daily Ichimoku cloud could potentially flip market sentiment, leading to a retracement towards $64k. Investors are advised to closely monitor both technical indicators and on-chain metrics in the coming weeks to make informed decisions.
Over an extended period, the activity of Bitcoin holders reflects their sentiment towards this asset class. More than half of all bitcoins have remained inactive for over a year, demonstrating confidence in its long-term value. As BTC prices continue to test critical supports, the actions of these participants, alongside key technical signals, will play a crucial role in shaping market direction.