Nearly Half of the Bitcoin Supply is Dormant – Glassnode

45% of Bitcoin Supply Unmoved for 6 Months

New research from Glassnode has highlighted a significant trend in the behavior of Bitcoin holders. According to their latest data, 45% of the total Bitcoin supply has remained inactive for at least six months.

This inactivity suggests that many investors hold onto their coins despite market fluctuations, showing strong confidence in the cryptocurrency’s long-term value. This finding comes after Bitcoin reached a new all-time high approximately five months ago.

Despite this peak and the subsequent price volatility, many investors have chosen not to sell their holdings but are maintaining their positions. The analysis focuses on a metric known as the “realized cap HODL waves.” This indicator tracks the age of coins in circulation, revealing how long Bitcoin has been held in wallets without being moved.

The data showed that over 45% of all Bitcoin has stayed in the same wallets for over half a year. Glassnode’s report also examines the activities of long-term holders (LTHs).

These entities or individuals have held Bitcoin for at least 155 days. The report indicated that while these holders did distribute some of their coins leading up to and following the all-time high, there has been a notable decrease in the selling pressure from this group.

This trend suggests long-term holders are more inclined to retain their BTC holdings.

Market Concerns Contrast with Holder Resilience

Meanwhile, the behavior of these holders contrasts with the concerns circulating in the market recently. Many traders and analysts have been wary of potential sell-offs, particularly after the significant drop in Bitcoin prices at the start of August.

For instance, in the past few days, a substantial amount of dormant Bitcoin, valued at over $1.7 billion, has been moved on-chain, causing a stir among market analysts and investors. This movement, which took place between August 11 and 12, involved 29,206 Bitcoin that had been inactive for a considerable period, raising fears of potential selling pressure in the market.

Notable BTC Movements

According to the data, 18,536 BTC, which had been inactive for two to three years, was moved on August 11. This BTC movement was followed by another movement of 5,684 BTC, which had been dormant for three to six months, a few hours later.

Another notable movement of BTCs occurred on August 12. This transfer involved 4,986 BTC, which had stagnated for three to twelve months.

Additionally, 2,394 BTC lying dormant for an even longer stretch of three to five years were also mobilized, injecting new life into these previously inactive funds. The scale and timing of these movements have led to speculation about their impact on Bitcoin’s price in the short to medium term.

Potential Selling Pressure?

Typically, when large amounts of Bitcoin that have been dormant for extended periods are moved, it can signal the possibility of increased selling pressure. This effect is especially concerning in times of low liquidity, where such large sales could have a pronounced effect on the market, usually driving prices down.

However, not all analysts share a bearish outlook. In an investment note dated August 14, Tony Sycamore, an analyst from IG markets, offered a more optimistic perspective. He pointed out that despite the recent $500 billion sell-off in the crypto market, Bitcoin had shown resilience.

Sycamore attributed this resilience to improving macroeconomic conditions and a favorable shift in risk sentiment following lower-than-expected US Producer Price Index data. Sycamore suggested that Bitcoin might continue to gain ground, potentially moving towards the $70,000 mark in the next few months.

He noted that the market positioning had become cleaner following the recent dip below $50,000, which sets the stage for a possible upward trend. Current Coingecko data shows that BTC’s price trades below $60,000, down 3.6% in the last 24 hours, but it’s still up almost 99.5% over the past 12 months.

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