Bitcoin Diamond Hands Remain Strong As Supply Hits New ATH
On-chain data shows that Bitcoin’s diamond hands remain strong as its supply hit a new all-time high.
Supply of long-term Bitcoin holders increased to a new ATH
According to Glassnode’s latest weekly report, long-term holders are now holding 14.46 million BTC. The “long-term holders” (LTHs) here refer to one of the two main cohorts that the Bitcoin market is usually divided into.
This group includes all investors who have held their coins for at least 155 days without moving or selling them on the network. The other side of the sector comprises “short-term holders” (STHs), natural investors who carry their coins as long as they are below this threshold value.
Statistically speaking, the longer an investor holds his coins, the less likely he is to sell them at any time. For this reason, LTHs make up the most convincing part of the market. This cohort is also sometimes referred to as the “diamond hands” of the market because of this fact.
LTHs comprise an important part of the market, so their behavior is worth watching. One indicator that helps track their movements is the “LTH supply”, which measures the total amount of Bitcoin currently held in these investors’ wallets.
Now, here is a graph that shows the trend of this BTC indicator over the last few years:
The value of the metric seems to have been climbing in recent days | Source: Glassnode's The Week Onchain - Week 21, 2023
As shown in the chart above, the supply of Bitcoin LTH declined during the first half of 2021 when the rally took place. This means that the profit-making situation of the rally was able to attract even these diamond hands to sell at that time.
After the rally, however, these investors started to show a tendency to accumulate again and have since added a net amount of coins to their portfolios. The uptrend was initially steep, but the metric mostly moved sideways between the bull highs in the second half of 2021 and the start of the bear market.
During the bear market, these holders led to slow but steady accumulation, selling only slightly during specific events such as the November 2022 FTX crash.
Then, in the early months of the rally that began this year, its supply growth slowed again, but there was no notable period of decline. This would imply that while some investors may be selling, new STHs are also maturing in this pool to balance these sellers.
In recent weeks, however, Bitcoin LTHs have once again shown a rapid accumulation trend and have driven their supply to a new all-time high of 14.46 million BTC. This suggests that these diamond hands have not wavered from the recent struggle in price.
The 155-day cap would put the supply of these newly matured LTHs at the lows that followed the FTX crash, meaning these investors would currently be some of the most profitable hands in the market.
BTC price
At the time of writing, Bitcoin is trading around $27,300, up 1% over the past week.
BTC has surged | Source: BTCUSD on TradingView
Featured Image from iStock.com, Charts from TradingView.com, Glassnode.com