On-chain data shows that Bitcoin HODLers have continued to increase their holdings of late, adding to their holdings at a rate of 194,500 BTC per month.
Bitcoin’s illiquid supply has continued to rise as of late
According to on-chain analytics firm Glassnode, illiquid BTC supply is currently growing at rates near cycle highs. The “illiquid supply” here refers to the combined wallet amounts held by bitcoin companies that have had little or no history of spending their coins.
An “entity” here is a single address or a collection of addresses that Glassnode has determined through its analysis to belong to the same investor. The companies that have engaged in small-scale sales would be staunch BTC investors, popularly known as “HODLers.”
The supply of these HODLers can also be tracked using the Long-Term Holder (LTH) Supply metric, where LTHs are investors who bought their coins more than 155 days ago.
However, the LTH supply indicator can lag behind as it only includes coins that are at least 155 days old. So if some investors planning to hold for a longer period make purchases, the LTH offering would not register them until 155 days later.
The illiquid supply somewhat mitigates this issue by counting all coins that are likely to mature into the LTH cohort based on past experiences of their buyers. Of course, this method is not entirely accurate, but it can still give us an idea of the buying or selling behavior of HODLers.
Now, here is a chart showing the trend of the Bitcoin Illiquid Supply Change metric, which measures 30-day changes in this supply:
It looks like the value of the metric has been quite high for the past few days | Source: Glassnode on Twitter
As illustrated in the chart above, the change in illiquid bitcoin supply has surged to extremely positive levels lately, suggesting that holdings by long-knowing HODL investors have increased.
The chart shows that the value of the indicator has been positive for a long time, except for a few short periods. For example, these investors had already made distributions in February and March. Interestingly, the asset’s local peak coincided with this sale, and BTC subsequently posted a sharp decline.
With the recovery from this crash, HODLers began accumulating their holdings again, but their purchases remained relatively small. More recently, however, these investors have increased their buying as the change in illiquid supply is now approaching the cyclical highs seen during the consolidation phase leading up to the January rally.
According to the indicator’s current reading, these investors are buying at a rate of 194,500 BTC per month. While this surge doesn’t necessarily mean an uptrend, the fact that these HODLers have continued to buy during the final stretch of the Bitcoin rally is a positive sign.
BTC price
At the time of writing, Bitcoin is trading around $30,700, up 2% over the past week.
BTC has been flat lately | Source: BTCUSD on TradingView
Featured image of Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com
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