A new report from Glassnode, an on-chain analytical firm, has buttressed recent data indicating Bitcoin holders are adding to their holdings. These long-term Bitcoin investors, often known as “HODLers,” don’t appear to be phased by the recent volatility in Bitcoin’s price.
According to on-chain data, long-term holders have been rapidly amassing Bitcoin, adding more than 50,000 BTC each month to their holdings.
Monthly Accumulation Of BTC Worth $1.35 Billion
Bitcoin is currently showing signs of slowing down, as its price just dipped below $27,000. It would appear that short-term speculators are mostly to blame for the persistent selling pressure, as data shows whale investors are seeing this opportunity to buy more BTC at a discount rather than secure profits.
According to Glassnode’s HODLer Net Position Change metric, long-term holders are purchasing an average of 50,000 BTC worth $1.35 billion at the current price of Bitcoin every month.
Another metric, the Long-Term Holder Supply, which measures the amount of BTC’s market cap with holders, also reached an all-time high of 14.859 million BTC. This means 76.1% of the total circulating supply has not moved in the past five months. Consequently, 94.8% of the total Bitcoin supply has not moved in the past month.
Source: Glassnode
To back up this data of increased accumulation, popular crypto analyst Ali Martinez shared chart data from Santiment showing Bitcoin whales have purchased around 20,000 BTC since the beginning of October, worth roughly $550 million.
At this rate, the number of BTC vaulted by holders is poised to pass 50,000 in October. This increased accumulation suggests that long-term holders remain confident in Bitcoin’s long-term potential and see this price correction as temporary.
#Bitcoin whales have purchased around 20,000 $BTC since the beginning of October, worth roughly $550 million! pic.twitter.com/47ZePiaIII
— Ali (@ali_charts) October 10, 2023
BTC price falls below $27,000 | Source: BTCUSD on Tradingview.com
Bitcoin Supply Tightens
According to Glassnode, only 11.5% of BTC’s circulating supply changed hands in the last 3 months, indicating a prolonged inactive period of on-chain activity. That there are fewer transactions suggests that investors are unwilling to sell at the current price as the industry awaits approval of spot Bitcoin ETFs.
Source: Glassnode
If this current trend holds, then the current downtrend could be short-lived, especially if sentiment among smaller traders also turns toward buying. A predominantly hold mentality would give the asset time to recover and establish significant support that serves as a bounce-off point for another rally.
Bitcoin is currently trading at $26,766 and is down by 1.31% in a 24-hour timeframe as it approaches the next major support near the $26,500 level. If enough large players accumulate at these lower prices, it may establish a price floor as bulls push the price back up.
As crypto analyst James Straten points out, Bitcoin could jump 50% as part of the correlation between the Grayscale Bitcoin Trust and the price of BTC.
Featured image from Shutterstock, chart from Tradingview.com
