Bitcoin: What you should learn from BTC’s new ownership trends

Bitcoin has been experiencing a change in holding maturity among owners in recent months. This is further reflected in a significant transfer of wealth with long-term holders capitulating their holdings.

A subsequent accumulation has taken place which puts Bitcoin in the hand of low-cost basis owners.

A tale about Bitcoin

Following the Luna collapse in May there has been a significant changing pattern among long-term holders (LTH).

LTH supply has been range bound between 13.56m to 13.27m BTC since the peak in November 2021.

This means that the amount held by them has declined by just 300K BTC with half of it being sold after the Luna implosion.

Source: Glassnode

However, the situation surrounding short-term holders (STH) is different as they have stepped in at various low points and accumulated that 300K BTC.

It remains to be seen if they will eventually hold on to this accumulation considering the factor of market volatility. STHs usually enter the market during a bullish period and sell at the bottoms despite several exceptions.

Such events describe a transfer of coins to new buyers who are initially classed as STHs.

Interestingly, they have a low-cost basis but are still in a better financial position to hold thereon.

Source: Glassnode

In a macro scenario, exchanges have continued to see a decline in supply held since the trend began after the March 2020 capitulation.

Exchanges have seen over -100K BTC in net outflows after the Luna collapse in May 2022.

This accounts for 3.2% of the total outflows since March 2020 all-time high (ATH).

As the price volatility took place in the past year, exchange outflows continued with great intensity. As per analytic firm Glassnode, “This underscores a persistent structural demand, from both small and large investors, for sovereign self-custodial assets.”

Source: Glassnode

Conclusion

Could these ownership trends pave the way for the stable growth of Bitcoin? This remains to be seen as the market continue to thrive in the relief rally.

BTC, at press time, was trading just above $24,030 according to CoinMarketCap as selling pressure took charge in recent days.