A pattern in the holdings of long-term Bitcoin holders could indicate that the current bull market is 40% complete.
Long-term Bitcoin holders have been making distributions recently
In a new post on X, Glassnode chief analyst Checkmate discussed the recent behavior of long-term Bitcoin holders. The “long-term holders” (LTHs) here refer to the BTC investors who have held onto their coins for more than six months.
Statistically, the longer an investor holds on to them, the less likely they are to eventually sell their coins. Because LTHs last for longer periods of time, they are considered quite resolute.
And in fact, they show this resilience in their behavior and rarely sell, regardless of what is happening in the broader market. The times sold are all the more remarkable.
Historically, LTHs have been distributed during bull markets when the asset breaks its previous all-time high (ATH). Because of their long holding period, these investors accumulate large profits, which they then begin to spend when demand hits during bull rallies that happily take coins from them at high prices.
Checkmate explained that the cryptocurrency’s recent ATH break looked like any other in the past as LTHs have already started spending for this round.
The following graphic shows the development of the supply of Bitcoin LTHs in recent years.
NewsBTC
As shown in the chart above, Bitcoin LTHs have recently seen a decline in their supply. Remember that when this metric increases, there is a lag associated with the timing of the purchase and the increase in supply.
This is natural as the newly purchased coins must be aged for six months before they can be considered part of the cohort's holdings. However, drawdowns do not experience the same delay as the coins' age immediately resets to zero and they leave the group.
So the latest distribution of LTHs is actually taking place. “In the previous two cycles, the new demand for Bitcoin was able to absorb this LTH sell side for about 6 to 8 months, while driving prices up several times,” explains the head of Glassnode.
The chart below shows that LTH supply has typically experienced a decline of around 14% during these bull selloffs.
NewsBTC
Checkmate notes that based on this historical average decline in LTH supply, this process would be approximately 40% complete in the current Bitcoin cycle.
BTC price
Bitcoin has risen sharply in the last 24 hours and its price has now returned to $71,800.
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