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Tag: Supply

  • Old BTC Supply Approaches New Highs

    Old BTC Supply Approaches New Highs

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    Bitcoin (BTC) has seen a boom in demand during the past 48 hours as its price spiked above $48,000 for the first time since 1 January 2022. In tandem with the recent price recovery, BTC’s network activity has jumped in the last few days.

    The old BTC supply percentage, an indicator that shows the trend of long-term holders and Bitcoin whales, has increased substantially since August 2021.

    According to Glassnode, an on-chain analytics firm, the overall percentage of Bitcoin supply last active at least 12 months ago has reached 63%, near the all-time high level of 63.4%.

    “As we approach the end of Q1-2022, we can see an extraordinary increase in the proportion of coins aged 1yr+, which has risen by 9.4% of circulating supply over the last 8-months. These coins largely reflect BTC volumes accumulated in the Q1-2021 phase of the bull market and the owners have thus held through two 50%+ drawdowns and three all-time highs. This recovery is quite similar in scale and duration to the 2018-19 recovery,” Glassnode highlighted in its recent weekly report.

    BTC Network

    Bitcoin network activity has picked up pace recently amid a rise in price and institutional inflows. In addition, BTC exchange outflows are rising. According to the data published by Whale Alert, a blockchain tracking platform, a leading BTC wallet moved 2,163 coins worth more than $100 million from digital exchange Coinbase to an unknown wallet on 28 March.

    “The Bitcoin market has seen a stronger week, rallying off the lows of $40,710, and breaking out of the consolidation range to a new local high of $47,649. This is the first sustained rally after many months of sideways choppy price action. Bitcoin bear markets can be long, painful and drawn out, however, they have the ultimate result of reshuffling supply ownership away from weaker and towards stronger hands,” the report added.

    Bitcoin (BTC) has seen a boom in demand during the past 48 hours as its price spiked above $48,000 for the first time since 1 January 2022. In tandem with the recent price recovery, BTC’s network activity has jumped in the last few days.

    The old BTC supply percentage, an indicator that shows the trend of long-term holders and Bitcoin whales, has increased substantially since August 2021.

    According to Glassnode, an on-chain analytics firm, the overall percentage of Bitcoin supply last active at least 12 months ago has reached 63%, near the all-time high level of 63.4%.

    “As we approach the end of Q1-2022, we can see an extraordinary increase in the proportion of coins aged 1yr+, which has risen by 9.4% of circulating supply over the last 8-months. These coins largely reflect BTC volumes accumulated in the Q1-2021 phase of the bull market and the owners have thus held through two 50%+ drawdowns and three all-time highs. This recovery is quite similar in scale and duration to the 2018-19 recovery,” Glassnode highlighted in its recent weekly report.

    BTC Network

    Bitcoin network activity has picked up pace recently amid a rise in price and institutional inflows. In addition, BTC exchange outflows are rising. According to the data published by Whale Alert, a blockchain tracking platform, a leading BTC wallet moved 2,163 coins worth more than $100 million from digital exchange Coinbase to an unknown wallet on 28 March.

    “The Bitcoin market has seen a stronger week, rallying off the lows of $40,710, and breaking out of the consolidation range to a new local high of $47,649. This is the first sustained rally after many months of sideways choppy price action. Bitcoin bear markets can be long, painful and drawn out, however, they have the ultimate result of reshuffling supply ownership away from weaker and towards stronger hands,” the report added.

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  • 82% Of Bitcoin Short-Term Holder Supply Now In Loss, Capitulation Ahead?

    82% Of Bitcoin Short-Term Holder Supply Now In Loss, Capitulation Ahead?

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    On-chain data shows around 82% of the Bitcoin short-term holder supply is currently in loss, suggesting that capitulation may occur soon.

    82% Of Bitcoin Short-Term Holder Supply Now In Loss, While Total STH Supply Declines

    According to the latest weekly report from Glassnode, the BTC STH supply is nearing all-time lows at the moment. However, 82% of it is being held at a loss.

    The “BTC short-term holder supply” is that part of the total Bitcoin supply that has been held for less than 155 days.

    The investors holding this supply are usually the likeliest to sell their coins off during market volatility, and especially when a capitulation flush out occurs.

    An on-chain indicator, the Bitcoin STH supply in profit/loss, tells us the percentage distribution between these coins being held at a profit and those being held at a loss.

    When a high amount of this supply is in loss, there may be more sell-side pressure in the market as short-term holders capitulate easily.

    Related Reading | Bitcoin MPI Rises To Highest Value Since March 2021, Bull Rally Soon?

    Now, here is a chart that shows the trend in the BTC STH supply over the history of the coin:

    Bitcoin Short-Term Holder Supply In Profit/Loss

    Looks like the value of the indicator has declined over the years | Source: Glassnode's The Week Onchain - Week 11, 2022

    As you can see in the above graph, the Bitcoin STH supply has been observing a constant downtrend over much of the history of the coin, and is currently near all-time low values. The decrease in this supply happens when some of the coins mature beyond the 155-day cutoff, thus becoming part of the “long-term holder supply” instead.

    Since short-term holders can be a big source of sell-side pressure, the number of coins held by them severely going down can be bullish for the price of the crypto.

    Related Reading | Bitcoin Hashrate Swells 15% Since Last Week As Analysts Expect Mining Difficulty To Increase

    However, while the supply is low right now, around 82% of it is currently in loss. So despite the decline in total supply, these coins in loss still amount to around 2.5 million BTC, and thus they can add quite significant sell pressure to the market.

    As macro uncertainties like the Russian invasion of Ukraine continue to loom over the Bitcoin market, these short-term holders may finally break and capitulate in case their coins remain in the red or go even deeper.

    BTC Price

    At the time of writing, Bitcoin’s price floats around $38.5k, down 1% in the last seven days. Over the past month, the crypto has lost 10% in value.

    The below chart shows the trend in the price of BTC over the last five days.

    Bitcoin Price Chart

    BTC's price seems to have been in consolidation for a few days now | Source: BTCUSD on TradingView
    Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com

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