Nearly 50% of Bitcoin Supply Has Remained Dormant in Wallets Over 6 Months

The latest The Week Onchain" report by Glassnode revealed that nearly 50% of Bitcoin supply has not moved from their current wallets in half a year.

This analysis suggests that many Bitcoin holders have held onto their coins despite Bitcoin's erratic price moves. It also indicates that many investors did not sell even when Bitcoin hit a new all-time high around five months ago. Instead, most Bitcoin investors continue to increase their holdings.

Bitcoin Holdings Remain Steady

The recent observation highlights many Bitcoin holders' commitment to long-term investment strategies. The realized cap HODL waves" indicator, used by Glassnode, revealed that over 45% of all Bitcoins have been dormant for the past six months.

Despite Bitcoin reaching a new all-time high in March and falling to a multi-month low recently, many investors chose to do nothing.

Further, the study sheds light on the activity of long-term holders (LTHs), who typically hold onto their Bitcoin for at least 155 days. The study accessed the LTH distribution before and after the recent all-time high.

Glassnode noted that the weekly LTH supply change helped assess their aggregate wallet balance. The analytical platform shared a chart showing the LTH distribution before and after the March ATH.

According to the findings, there was substantial LTH distribution in the days leading to Bitcoin's March all-time high. However, the metric has turned positive, with only a few trading days witnessing significant selling pressure after the March ATH. This positive shift suggests that long-term holders now prefer holding onto their coins.

Fewer than 1.7% of trading days have ever recorded a larger distribution pressure. More recently, this metric has returned to positive territory, indicating that LTH cohort are expressing a preference for holding onto their coins," Glassnode stated.

This trend shift has resulted in a stabilization and subsequent growth in the percentage of network wealth they control.

Moreover, this shift marks a slowdown in the selloff pressure traditionally exerted by LTHs. Despite considerable sell-offs during the market's peak, the wallet holdings of long-term investors remain at historically high levels compared to previous all-time highs.

BTC Circulating Supply Dormant for Over 3 Years

The recent discovery mirrors a March data from Glassnode. The report revealed that the number of Bitcoins that had been untouched for over three years surged steadily, rising from a little over 42% to more than 46%. These also included coins acquired during the 2021 bull market.

The data indicated that many investors who acquired Bitcoin when its price declined from $50,000 to $30,000 between May and July 2021 kept their holdings even after the 2021 bull run.

Meanwhile, concerns about market volatility continue to loom, especially after significant sell-offs at the beginning of August. The potential for revisiting six-month lows remains a concern for many traders, particularly with on-chain data indicating movement among older coins.

Adding to the market's uncertainty, the Crypto Fear & Greed Index shows fear, reflecting the current anxiety within the broader crypto community.

However, some optimism persists, driven by expectations of global financial policy easing and the end of a four-year consolidation phase.

Specifically, the increasing global money supply has led experts like Charles Edwards of Capriole Investments to express optimism about BTC's future in this evolving financial sector.

Global money supply is exploding up. Plus we just broke out of a massive 4 year consolidation. What do you think this means for Bitcoin? pic.twitter.com/eA2vtOo6Zd

- Charles Edwards (@caprioleio) August 13, 2024

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