Bitcoin: What the HODLer dynamics of BTC suggest

Journalist

Posted: December 13, 2023

• The Bitcoin Supply Last Active metric noted an interesting development over the past few weeks.
• This was a positive for long-term holders for the coming months.

The crypto market has trended higher since mid-October. This was evidenced by the steady increase in the market cap of Bitcoin [BTC], as well as the altcoin market capitalization. However, the growth was not isolated to BTC or Ethereum [ETH].

The breach of the round number resistance at $30k in October was crucial, and another important psychological number was near BTC’s current prices.

Despite the rally past $44k, the inability of the bulls in the past few days to retain control of the $42k support raised concerns that Bitcoin has registered a local top.

In that scenario, prices would be set to trend lower in the next month or two as the market recovers after the strong rally.

HODLers exhibit diamond hand tendencies

Yet, despite these concerns, the long-term BTC holders showed no desire to sell their holdings. Crypto analyst Will Clemente noted that over 70% of Bitcoin’s circulating supply hasn’t moved in over a year.

The fact that over 70% of Bitcoin’s supply hasn’t moved in at least a year is wild as a standalone stat.

It’s even more wild when considering the context that a year ago was right after FTX went down and BTC has gone up nearly 3x since. pic.twitter.com/0wWpVWzFFT

— Will (@WClementeIII) December 12, 2023

AMBCrypto dived further into this observation to unearth what the implications could be for Bitcoin investors. The metric in question was from the Percent of Supply Last Active 1+ Years Ago from Glassnode.

A closer analysis showed that the metric trends higher during the accumulation phase of the cycle. It begins to decline a few months before Bitcoin reaches its ceiling. This happened in 2020, and the metric began to trend lower from September 2020.

It reached a local bottom around October 2021 before ticking higher again. That year represented Bitcoin’s highs around the $60k mark, reached twice in April and October 2021.

Therefore, the uptrend in the supply last active in recent weeks suggested that the market likely wasn’t nearing a top.  Long-term investors could draw some inspiration from this metric and continue to sit on their holdings or even add to it.

A look at address balances showed that whales had begun to slow down

Source: Santiment

AMBCrypto analyzed the data from Santiment to understand what holders of various sizes were up to. As expected, the shrimp holdings were trending higher, as they have been for years.

Surprisingly, the shark and other, lesser holdings have been flat since late October.

This was a surprise because from 2017-2020, the <1000 BTC holders had been trending higher as a percentage. The decline from 2020-2022 was gradual but sped up massively following the FTX implosion.

Read Bitcoin’s [BTC] Price Prediction 2023-24

The whale holdings trended higher rapidly from June 2022 to January 2023 but have slowly slipped lower this year. This raised questions about whether the whales were unloading slowly after BTC rose above $30k to secure profits.

Are they waiting for another plunge to begin increasing their holdings? This is a question that only time will answer definitively.