Bitcoin’s inactive supply is approaching a record high, with more than 60% of BTC remaining unspent for at least a year

  • Only twice before has the proportion of available supply in its wallet been so overwhelmingly stationary.
  • Bitcoin (BTC) may be struggling at $40,000, but new data shows that few people are interested in selling.
  • According to data from the on-chain analytics firm Glassnode, despite price volatility, more than 60% of the BTC supply has not left its wallet in a year or more.

Stronger hands have rarely been seen

  • Long-term investors’ obstinate hodling distinguishes the current Bitcoin market climate from most other downtrends.
  • With spot price action losing 50% versus November’s all-time highs last month, many expected a sell-off but among seasoned investors, the sell-off never materialized.
  • Long-term investors, on the other hand, have been adding to or maintaining their BTC exposure for an extended period of time.
  • As of Feb. 18, 60.61 percent of the BTC supply had not been used in a transaction for a year or more, according to Glassnode’s HODL Waves indicator.

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The figure is significant because it has only happened twice before in Bitcoin’s history for the one-year-or-more value to reach that level.

According to entrepreneur and investor Alistair Milne, both instances occurred after a downtrend and before a significant bounce back in Bitcoin price action.

As a result, the odds are stacked against Bitcoin forming an entirely new trend in the medium term, potentially defying the generally pessimistic narrative about flagging macro support, rising interest rates, and geopolitical tensions.

“Long term HODL’ers are patiently HODL’ing because they know what’s likely to come soon,” said Philip Swift, analyst at trading suite Decentrader, of the data.

Speculators will suffer as a result of low-timeframe moves

Short-term trends appear to be of little consequence for the vast majority of bitcoins in circulation, but they are causing some concern this week. Analyzing order book activity on major exchange Binance, for example, analytics resource Material Indicators observed “rugs” of support disappearing above $40,000 just before Friday’s drop to two-week lows.

Smaller investors have slowed their accumulation activities in the crypto space over the last week due to rising uncertainty.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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