Bitcoin’s price has slowed down, raising questions among investors. Research by CryptoQuant points to a significant drop in the supply of short-term holders as one of the reasons.
Change in Market Dynamics
According to CryptoQuant, the 30-day change in Bitcoin’s short-term holders’ supply has hit its lowest levels since 2012, indicating a major shift in market dynamics.
Transition to Long-Term Holders
The supply of Bitcoin is increasingly shifting towards long-term holders—investors who typically accumulate and hold Bitcoin for 155 days or more. While this shift indicates confidence in Bitcoin’s long-term value, the lack of activity from short-term holders may be suppressing the asset’s price momentum.
The Need for Fresh Demand
Julio Moreno, CryptoQuant’s Head of Research, explained: “Historically, Bitcoin reaches new highs when new holders buy from long-term holders, driving up prices.” While accumulation by long-term holders is often a precursor to future price increases, fresh demand from short-term holders is essential to ignite a sustained rally.
Without fresh demand from short-term holders, Bitcoin’s price may struggle to rise as dramatically as it has in previous cycles.
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