The Long-Term Holder (LTH) Aging Velocity has dropped below zero, indicating a shift in behavior among experienced holders. This article explores what it means for the market.
What is LTH Aging Velocity?
LTH Aging Velocity is a key on-chain metric that tracks the 30-day change in LTH supply share. It helps investors understand whether long-term holders are accumulating or distributing Bitcoin. When LTH Aging Velocity is above zero, it indicates more coins are aging into long-term supply, which is a sign of accumulation. When it drops below zero, it signifies that long-term holders are selling and transferring their assets to newer participants.
Impact on the Bitcoin Market
Currently, the LTH Aging Velocity stands at -1.2%, clearly reflecting a distribution phase. The last time the LTH Aging Velocity crossed zero was on July 16th when Bitcoin traded around $118,000. Historically, such regime shifts can lead to significant changes in market behavior. Analysts suggest that as much as 2% of the total LTH supply, or roughly 300,000 BTC, could be distributed based on past trends.
What to Expect Next?
The ongoing shifts in LTH distribution signal investors to watch the market closely. A continued rise in price could accelerate this trend, leading to more short-term price swings as new buyers absorb the distributed supply. Additionally, this shift signifies healthy market dynamics: as experienced holders exit, new participants enter, creating opportunities and maintaining the market cycle.
The drop in long-term holder Bitcoin levels underscores a transition to a distribution phase. Investors should closely monitor the ongoing changes as they may impact short-term price fluctuations in Bitcoin.
