Despite a 21% decline from its all-time high, most Bitcoin (BTC) in circulation has remained untouched in wallets for over six months, according to recent on-chain data. This trend underscores the increasing confidence among long-term holders in the cryptocurrency market.
Glassnode's Hodl Wave chart shows that approximately 75% of all Bitcoin has not moved for at least six months, a significant jump from just a week ago when around 45% of Bitcoin had been dormant for half a year or more. This rise in immobile Bitcoin indicates that investors are increasingly treating Bitcoin as a store of value, holding onto their assets with expectations of future price gains.
The growing tendency to hold Bitcoin for extended periods could have major implications for the market. As more Bitcoin is held by long-term investors, the available supply for trading decreases. This reduced supply, coupled with steady or rising demand, could potentially push Bitcoin's price higher in the future.
On the other hand, short-term holders—those who have held Bitcoin for fewer than 155 days—are facing a different scenario. On-chain analyst James Check noted that over 80% of short-term holders are currently underwater, having purchased Bitcoin at prices higher than the current market value. This group is particularly susceptible to panic selling, which could add downward pressure on Bitcoin prices.
"This situation is reminiscent of the market conditions in 2018, 2019, and mid-2021," Check noted, "when many investors were at risk of panic selling, potentially sparking a bearish trend."
Currently, broader market sentiment remains cautious, as reflected by the Bitcoin Fear & Greed Index, which has registered a score of 28, indicating a state of fear. This sentiment is the lowest it has been since December 2022.
Bitcoin prices had briefly climbed above $60,000 over the weekend but have since retreated to around $58,619.
