A quick peek into Bitcoin spending reveals this

Bitcoin

losing support at $30k on 22 June triggered massive sell-offs across the board. Even after the digital asset’s recovery to $33k, the market has not found a stable footing. From a macro perspective, the events in the current market strike a strange resemblance to the 2017 macro’s peak. This was especially true with respect to the supply held by long-term holders [LTH] and short-term holders [STH].

The attached chart highlighted macro peaks observed in 2017 and 2021. As shown, the ‘Peak HODL’ phase was largely dominated by the LTH supply in both cycles. After hitting this level, there was e a phase of macro distribution, one wherein BTC wealth was being transferred from Long term to Short-term holders.

This led the coin to a peak, after which the LTH stopped spending and began reaccumulating, despite coins falling into an unrealized loss. After the latest $64k peak, LTH owned an additional 5.25% of the circulating supply after reaccumulation. Out of this sum, 1.5% was, at press time, held at an unrealized loss.

The LTH has continued to hold despite the prices approaching cost basis. This seemed to reflect a level of bullishness and trust among the sector’s long-term players. This also fell true while considering the reduced spending of older coins.

In fact, data suggested that older coins [those > 1yr old] reduced their spending notably after the May sell-off.

This highlighted the low demand for on-chain settlement but also affirmed long-term investors’ belief in the future of the asset.

Interestingly, the movements taking place currently in the market are major with the younger coins [those <1yr old, excl. <1day]. Over the past few months, younger coins accounted for over 45% of the total transaction count. This could be due to the new entrants in the market and their selling during the capitulation period.

Ergo, it seemed to be clear that the prevailing market has been seeing volatility due to the buyers from the last 6-months spending their coins and realizing losses. Traders may want to watch out for the dormancy maintained by the old hands. This could be an indication of their conviction to hold on to Bitcoin and play along in the bullish market.