Recent analysis confirms that long-term Bitcoin (BTC) holders are coming back to life as BTC prices rise.
In a July 13 tweet, Philip Swift, creator of on-chain data resource LookIntoBitcoin, revealed the classic bull market behavior of “older” BTC investors.
Value Days Destroyed Multiple prints BTC price bull signal
Bitcoin’s current price cycle may be dividing opinions as to how high BTC’s price could go, but one thing is certain: Hodler’s behavior is the same.
As BTC/USD has more than doubled in 2023, the on-chain issuance velocity has increased, indicating profit-taking.
Swift uploaded a chart of the Value Days Destroyed (VDD) Multiple and pointed out that the current cycle is little different from any previous one in this regard.
“The increased volume of on-chain spending shows where we are in the cycle right now,” read an accompanying Twitter comment.
“History doesn’t repeat itself, but it often rhymes.”
VDD is based on the existing CDD (Coin Days Destroyed) metric, which measures periods of inactivity every time a lot of BTC moves on the chain. It uses CDD data and takes into account the current BTC price and its multiple then compares the 30-day result to the 365-day moving average.
“It can detect when older coins are coming to market quickly to be sold,” Swift explains in a guide on LookIntoBitcoin.
“This typically happens when longer-term participants try to take profits as price rises in major bull market cycles.”
The VDD multiple is currently 1.32, just below its peak of 1.37 in 2023, recorded in April. For Swift, this is a telltale sign of a “stage one bull market.”
Bitcoin VDD Multi-annotated chart. Source: Philip Swift/Twitter
In response, Checkmate, senior on-chain analyst at data company Glassnode, called the results “remarkable.”
“It’s remarkable how consistent the cycles are. “People respond in the same way to similar stimuli,” he replied.
“This time is actually no different.”
Not just bitcoin diamond hands
Meanwhile, data from Glassnode underscores how tempting it could be for various classes of hodler to cash out at current prices.
Related: Bitcoin bulls “still have work to do” after XRP price surges 104%
Bitcoin’s Market Value to Realized Value (MVRV) ratio for long-term and short-term holders (LTHs and STHs, respectively) shows that both types of investors are clearly in the black.
LTH coins — defined as coins that have been dormant for at least 155 days — are worth a total of 1.52x what they were when they last moved. For the STH equivalent, the number is 1.12.
Previously, Cointelegraph reported on the increasing impact STHs are having on BTC price action.
Bitcoin LTH, STH MVRV vs BTC/USD chart. Source: Glassnode
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This article does not contain any investment advice or recommendations. Every investment and trading activity involves risk and readers should do their own research in making their decision.
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