Long-time Bitcoin (BTC) HODLers are refraining from selling their holdings, on-chain data from Glassnode shows.
According to Glassnode’s “BTC Percent Supply Last Active 2+ Years” indicator, Bitcoin that was last moved well over two years ago reached a three-month low to 45.364%.
This trend indicates that Bitcoin HODLers who bought around the top of the last bull cycle in 2018 and before are showing deeper conviction as BTC consolidates above $55,000. Interestingly, the spike during December 2020 suggests that many may have sold at a breakeven of around $20,000, or the previous all-time high in late 2017.
Why is Bitcoin consolidating with low volatility bullish?
Bitcoin typically tops or sees a severe correction when long-time holders begin to sell rapidly.
In previous bull cycles, the sell-off from HODLers taking profit on their positions led to swift 50% drops, leading the entire cryptocurrency market to pullback intensely within short periods.
This trend coincides with the fact that HODLers are not selling a significant amount of BTC, indicating that the top could still be faraway from being reached.
Bitcoin stabilizing at around $55,000 is highly optimistic because of two main reasons. First, BTC has maintained a strong market structure despite some headwinds. Second, BTC consolidating closely under an all-time high is technically a positive sign.
In the past two weeks, Bitcoin faced major threats that could have catalyzed a serious short-term downturn.
Namely, the U.S. Treasury yields surged. This often causes tech stocks to drop-off, which negatively affects all risk-on markets.
Atop this, as CryptoQuant CEO Ki Young Ju explained, miners are holding a lot of Bitcoin that they have not sold in recent months. In fact, the amount of BTC moved by miners was significantly less compared to previous pullbacks this year. This may suggest that miners are likely expecting higher prices down the road.