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Bitcoin Hodling Reaches an All Time High: Are Investors Readying for a Bull Run?

Published July 5, 2023 12:11 PM
Teuta Franjkovic
Published July 5, 2023 12:11 PM
Key Takeaways
  • As the Bitcoin Supply Last Active 1Yr rises to an ATH of 13.4M BTC, HODLing continues to be the major dynamic among seasoned investors
  • By concentrating on holding their stash, long-term Bitcoin investors have demonstrated impressive fortitude
  • According to Fear and Greed index, Bitcoin bull run may be on a horizon

Data from on-chain analytics firm Glassnode  has shown that Bitcoin HODLing has reached its new all-time high, despite enduring a frigid bear market that took the price from a high near $70,000 in 2021 to about $16,000 at the start of 2023.

HODLing Remains Focus for Experienced Investors

The percentage of the circulating supply that has not moved in at least a year is shown by the Percent of Supply Last Active 1+ Years Ago indicator. Even though it would still be regarded as part of the circulating supply, Bitcoin, which has not changed hands in more than one year, may be called “illiquid.”

In the long run, less selling pressure on the network is possible the larger the illiquid supply, which is viewed favorably. BTC is, therefore, down more than 60% from its all-time high, but long-term investors have remained calm. BTC holdings by investors for at least a year have increased and are currently at an all-time high of 65.47%.

HODL BTC
Credit: Glassnode

The data also states that HODLing remains the primary dynamic amongst experienced investors as the Bitcoin supply last active over one year ascended to an ATH of 13.4 million BTC.

Yet more than 55% of Bitcoin’s circulating supply has not moved since 2021, and that percentage reflects a 10% decline over the period.

HODLers Resolute Despite of Adversity

A decline in supply last active would indicate a fundamental shift in investor views towards the asset, and so far, investors seem willing to accumulate and hold.

Such a pattern simply implies that Bitcoin has the capacity to increase with a new demand surge.

Data from Glassnode, which showed a rise in hodling activity by this group since the beginning of July after a period of active selling the previous month, further supports the resiliency of short-term BTC holders.

The research showed HODLing remains the primary market dynamic as steadfast HODLers remain resolute in the face of adversity, sending the Bitcoin Supply Last Active Bands to new ATHs.

 

Is a Crypto Bull Run On the Horizon per Fear and Greed Index?

The Fear and Greed Index can be thought of as a statistic or indicator that aids in determining market sentiment and movement in the cryptocurrency space, giving valuable information to any investors who may be sitting around wondering what will happen next.

The Index uses a scale of 0 to 100 to signify “extreme fear” and “extreme greed,” respectively. It gauges the market attitude of the cryptocurrency. Thus, the index is predicated on two fundamental and incredibly basic premises:

  1. Market investors are more anxious about the future of Bitcoin as the score declines. This might be a good time to buy.
  2. The greater the score, the more optimistic market participants are about Bitcoin’s future. This also implies that a market correction is overdue or that now is the ideal time to make a profit.

This index is primarily based on variables including market volatility, volume, dominance, surveys, sentiment on social media, and information from searches for Bitcoin. Let’s look at some actual cases to better understand the anxiety and greed surrounding Bitcoin:

  1. Extreme Fear: In November 2022, when Bitcoin fell to a two-month low  following the FTX debacle, the Bitcoin Fear and Greed Index registered a rating of 12, indicating that the market was extremely cautious.
  2. Extreme Greed: The index jumped to a whopping 92 out of 100 in February 2021, indicating tremendous market enthusiasm for Bitcoin, when Elon Musk announced Tesla will invest  a significant amount in the cryptocurrency. In contrast, in the most recent example, Bitcoin, which had been trading in “fear” since mid-2022, recently crossed the $20,000 area and, as a result, after a lengthy interval of over nine months, shifted from the “fear” scale to the “neutral” scale.

Let’s look at the newest Fear and Greed index:

Fear and Greed index
Credit: CoinStats

And this is the one from June 30 to compare, 2022 — just over a year ago:

HODLers Gonna Hold

The HODLers resumed accumulating after  Bitcoin crash’s rebound surge, although their buying was only moderately aggressive. However, as the illiquid supply change has recently gotten close to the cyclical highs recorded during the consolidation phase before the January rise, these investors have recently increased their buying.

The indicator’s current value indicates that these investors are purchasing at a monthly rate of 194,500 BTC. Even if this accumulation might not necessarily serve as bullish fuel on its own, the fact that these HODLers kept buying throughout the most recent Bitcoin advance is encouraging.