Recently, on-chain data indicates a shift in the Bitcoin long-term holder supply, marking a possible turning point. Analyst James Van Straten recently highlighted this trend, detailing what past patterns might suggest for Bitcoin’s future.
In his latest post on X, Van Straten discussed noteworthy changes in the Bitcoin market, particularly focusing on long-term holders, or LTHs. LTHs are defined by their commitment to holding BTC for over 155 days. This group stands in contrast to short-term holders (STHs), another major segment of the market based on holding durations.
Typically, STHs are more susceptible to market anxiety or excitement, often selling their holdings at the first hint of fear or hype. LTHs, however, are characterized by their steadfastness, holding onto their investments through both market downturns and surges.
However, even LTHs have their limits. They ultimately aim to realize profits, as evidenced by a selloff during Bitcoin’s recent all-time high, a rally too tempting for them to ignore.
To study LTH behavior, analysts often track the total supply held by these seasoned investors. A chart from Glassnode, shared by Van Straten, reveals this trend over Bitcoin’s history.
According to the chart, Bitcoin’s LTH supply had been decreasing in recent months as these investors capitalized on a market rally. Interestingly, there’s been a recent uptick, with an increase of approximately 20,000 BTC, suggesting a potential bottoming and reversal in LTH holdings.
Historically, a decline in this metric has often coincided with Bitcoin’s price peaks, which might not bode well for the cryptocurrency’s future movement. However, not every price peak aligns with a fundamental market cycle peak, as seen in the first quarter of last year, where a top occurred alongside a bottom in the LTH supply.
It remains to be determined whether this new pattern signifies a cyclical top or just another local peak on the journey to a larger price zenith.
In terms of Bitcoin’s current market performance, the cryptocurrency continues its upward trajectory, recently breaking past the $99,000 mark. This upward move is part of a recovery rally that began yesterday, reflecting renewed confidence among investors.
