On-chain data shows Bitcoin HODLers are steadily accumulating the cryptocurrency. It also reveals that their holdings are increasing by 194,500 BTC per month. So what does this indicate? Let’s look at the details
Growth in Bitcoin’s illiquid supply points to HODLer confidence
According to the data of the in-chain analysis firm Glassnode, there is an interesting situation. The illiquid supply of Bitcoin BTC is currently experiencing significant growth. On the other hand, it is approaching the highs of the cycle. What does the term “illiquid supply” mean? It refers to the total amount of Bitcoin held by entities that have a minimal history of spending their coins.
Glassnode defines an “entity” as a single address or a group of addresses belonging to the same investor. HODLers, often referred to as Bitcoin investors with high price expectation, are assets that have participated in limited selling activities.
Long-term holders (LTH) monitoring
The “long-term owner (LTH) supply” metric is used to monitor the supply of HODLer. LTHs are traders who bought their coins at least 155 days ago. However, this indicator may lag behind the current situation as it only includes coins for at least 155 days. As a result, purchases made by long-term investors are not reflected until after 155 days.
The illiquid supply measure helps reduce the lag in monitoring the behavior of HODLers. It includes all coins likely to enter the LTH cohort based on past experience of buyers. While not entirely accurate, it does provide valuable insight into the buying and selling patterns of HODLers.
Examining the illiquid supply change
A chart showing the trend in the Bitcoin “illiquid supply change” metric, which measures 30-day changes in supply, reveals important information.
The chart shows a recent spike in Bitcoin illiquid supply change. It also indicates that the holdings of long-term HODLers are expanding. The indicator has remained generally positive except for a few short periods, such as the scatter observed in February-March, which coincided with a significant drop in Bitcoin’s value.
Current Bitcoin accumulation trends
cryptocoin.com On the whole, following the recovery rally after the above-mentioned decline, HODLers continued to accumulate Bitcoin, albeit at a relatively moderate pace. Recently, however, these investors have intensified their buying activity as the illiquid supply change approaches the cyclical highs observed during the consolidation period before the January rally.
Based on the current value of the indicator, HODLers are buying 194,500 Bitcoins per month. This accumulation alone does not guarantee a bullish market. However, the continued buying activity by HODLers during the last Bitcoin rally points to positive sentiment.
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