- Most of these long-term investors were cashing out at a loss.
- Older age bands reaffirmed HODLing narrative.
Bitcoin’s [BTC] prolonged low volatility phase started to test the resilience of diamond hands. According to a 29 July tweet by on-chain analytics firm Glassnode, BTC supply which last moved between 1-2 years ago dipped to an 18-month low.
#Bitcoin $BTC Amount of Supply Last Active 1y-2y (1d MA) just reached a 18-month low of 2,394,729.027 BTC
View metric:https://t.co/KyZxmV0H09 pic.twitter.com/Mni0ChxCyL
— glassnode alerts (@glassnodealerts) July 29, 2023
Read Bitcoin’s [BTC] Price Prediction 2023-24
The sharp drop in unmoved supply suggested that long-term holders (LTH) were liquidating their BTC holdings, signaling a shift away from the popular HODLing narrative.
LTH are known to hoard coins for longer durations of time, at least six months as per Glassnode, and don’t exit their positions easily owing to market conditions. Naturally, the recent sell-offs sparked curiosity.
Long-term holders capitulate
BTC has moved in a tight trading range since hitting yearly peaks in the recent June rally. In the absence of any meaningful price rise, it was possible that most of these investors sold their holdings at a loss.
This was also evidenced by the dramatic increase in circulatory supply in loss. As per Glassnode, after a sharp dip seen last month, loss-making addresses swelled up over the past two weeks.
Source: Glassnode
Additionally, most of these investors acquired tokens before the extremes of the 2022 bear market. Despite a strong recovery, BTC’s price is yet to recover to those levels.
CryptoQuant’s Long term holder SOPR metric sank below 1 over the past week. Values less than ‘1’ typically suggest that long-term investors were cashing out at a loss.
Source: CryptoQuant
Nerves of Steel
While the 1 year-2 year age band recorded a drop, older BTC coins continued to sit dormant in investor wallets. BTC supply held for more than 2 years increased from 47% at the beginning of 2023 to 56% at the time of writing, data showed.
Source: Glassnode
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Similarly, holders who acquired their tokens atleast three years ago showed willingness to keep them locked in self-custody. This age band made up 40% of the total circulating supply.
Supply held for at least five years also grew over the last year.