Bitcoin: Long-term holders can influence BTC price in this way
- Addresses with a balance of 1,000–10,000 BTC accounted for the maximum number of holders.
- Whale activity around BTC remained high, and a few metrics were bullish.
Bitcoin’s [BTC] supply distribution looks fascinating as investors continue to redistribute their holdings. The confidence of long term holders in the king of cryptos has reached its highest level, which was evident from the latest data. However, investors were doubtful about Centralized Exchanges (CEX) as BTC’s exchange reserve plummeted. Is it a sign of increased accumulation, or were investors choosing alternatives like Decentralized Exchanges (DEX) to store their holdings?
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Long-term holders are ambitious about Bitcoin
As per Bitcoin magazine’s latest tweet, the supply held by Bitcoin’s long-term holders just reached a new all-time high. The metrics clearly revealed the faith investors had in BTC, as they expect the coin’s price to boom again over the coming months and years.
— Bitcoin Magazine (@BitcoinMagazine) July 21, 2023
A look at Bitinfochart’s data gave a better understanding of the current supply distribution of BTC among multiple groups of investors. Addresses with a balance of 1,000–10,000 BTC accounted for the maximum number of holders, as the percentage of coins held by them was 24.18%.
This group was followed by addresses with 10–100 BTC, and 100–1,000 BTC, which accounted for over 22% and 19%, respectively.
While long-term investors were reluctant to sell their holdings, it was interesting to note a considerable decline in Bitcoin’s balance on exchanges.
Jan Wüstenfeld, an author and analyst at CryptoQuant, pointed out in a recent analysis that BTC’s supply on exchanges was declining. In fact, Bitcoin exchange balances were down to levels last seen around the start of 2018.
As per the analysis, exchange balances declined by about 32% from their peak in March 2020, down from 3.1 million to 2.1 million BTC. The use of alternatives like DEXs and funds not included in the statistics may account for some of it.
Over the past few months, CEXs such as FTX and Binance have fallen under criticism either because of bankruptcy or lawsuits, which might have affected investors’ confidence in those platforms.
Will investors’ confidence in Bitcoin be reflected on paper?
Apart from long-term holders, whale activity around BTC also remained high for the last few weeks, as evident from its whale transaction count. BTC’s weighted sentiment after a dip also registered an uptick, suggesting that positive sentiment around the coin increased.
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As per CryptoQuant, BTC’s exchange reserve was decreasing, suggesting that the coin was not under selling pressure. On top of that, its Binary CDD was green. The metric meant that long term holders’ movements in the last 7 days were lower than the average.
This was yet another bullish signal, suggesting a price uptrend in the coming days. At press time, BTC was trading at $29,910.75 with a market capitalization of over $581 billion.