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Long-Term Bitcoin Holders Keep The Faith: 40% Supply Remains Untouched For Over 3 Years

A recent report from Bitfinex has shed light on a trend in the Bitcoin market. The report shows despite the unpredictability of the crypto market; long-term Bitcoin holders appear to be playing the patience game, signaling a buoyant outlook on the digital currency.

This resilience and sense of optimism come to the fore as Bitfinex’s Alpha report reveals roughly 40% of Bitcoin’s total supply has remained untouched for over three years, marking an all-time high.

Bitcoin Dormant Supply Hits Record Highs

The latest Bitfinex report illuminates that about 40% of Bitcoin’s supply has not witnessed any movement for more than three years. Based on the Coin Days Destroyed metric, the findings further highlight that this portion of the BTC has remained inactive on-chain.

Analysts at Bitfinex, in a note, deduced that this pattern highlights a prevailing mood of confidence, hinting at possible stability in the face of usual market fluctuations. The analysts noted:

This behavior insinuates a broader sentiment of optimism and potential resilience against market volatilities.

It is worth noting that such a trend can be interpreted as a clear indication that long-term Bitcoin enthusiasts are maintaining a bullish perspective.

Contrasting Metrics: Narrower Timeframes Hint At Bearish Sentiments

While the three-year metric paints a promising picture of enduring confidence, the picture is slightly different when the lens narrows to a one-year timeframe. Within this shorter period, the inactive supply metric points towards a bearish sentiment, hinting at potential price drops.

Bitfinex’s report stated: “Our analysis indicated that movements on this timeframe preceded the price drop.” A case in point is the sudden major Bitcoin fall on August 17, which led to the loss of roughly over $1 billion in liquidations.

This crash plunged BTC’s value momentarily to the $25,000 zone. The analysis by Bitfinex suggests that this crash can be attributed, in part, to the “newer” long-term holders.

According to the report, these individuals, who secured their positions during the bear market, are now experiencing a sense of “unease without succumbing to panic.”

Meanwhile, following the conclusion of the legal battle between the US Securities and Exchange Commission (SEC) and crypto asset manager Greyscale, in which the latter emerged victorious, Bitcoin experienced a notable surge.

Bitcoin’s (BTC) price chart on TradingView

BTC is trading above $27,000 when writing and marking a 5.2% increase in the past 24 hours. This news is especially significant considering BTC was hovering just below $26,000 and moving sideways before the announcement.

Featured image from Unsplash, Chart from TradingView

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JPMorgan Shares Prediction On Bitcoin’s Next Move: What You Need To Know

In the latest research report, financial giant JPMorgan Chase & Co. has recently shared its belief in Bitcoin and the crypto market. Bloomberg reported, citing data from the financial services firm, that the current downtrend phase in the crypto market might just be nearing its conclusion.

Notably, the deceleration in the market momentum, primarily attributed to a series of positive legal and regulatory developments that eventually lost steam, is in its last stretch, according to the banking institution.

Market Dynamics And Future Predictions

JPMorgan’s analyst, Nikolaos Panigirtzoglou, analyzed the situation and highlighted the diminishing open interest in the Chicago Mercantile Exchange (CME) Bitcoin futures contracts.

In the financial realm, when open interest, which reflects the cumulative unsettled and active futures contracts on exchanges, plunges, it often signals a weakening price trend. Consequently, the report suggests, “We see limited downside for crypto markets over the near term.”

The crypto domain witnessed an uplift in recent months. This surge can be attributed to multiple applications, led predominantly by BlackRock Inc., aiming to roll out the first US spot BTC exchange-traded funds.

A favorable courtroom verdict for Ripple Labs in its legal confrontation with the Securities and Exchange Commission (SEC) also contributed to the further uplift in the market sentiment.

However, the initial exuberance has been waning, according to the report. Market participants are now in anticipation mode, awaiting resolve on spot Bitcoin ETF approvals.

Meanwhile, the US Securities and Exchange Commission’s (SEC) impending appeal against the Ripple decision, which is yet to be disclosed, amplifies a “new round of legal uncertainty,” heightening the market’s responsiveness to subsequent legal developments, according to the report.

Bitcoin (BTC) Latest Price Action

So far, Bitcoin is still struggling to break above a notable resistance. The asset has ranged between the $25,000 and $26,000 zone in the past 7 days and currently trades for $25,890, at the time of writing.

Bitcoin has seen a decline of more than 10% in the past two weeks, and it is currently in red, down by nearly 1% over the past 24 hours.

Bitcoin (BTC)’s price chart on TradingView

Alongside its price, Bitcoin’s daily trading volume has also plunged in the past week, indicating less trading activity. The asset’s daily trading volume has fallen from a high of over $30 billion recorded last Friday to $12.1 billion in the previous 24 hours.

Notably, the recent pullback in crypto isn’t isolated. It mirrors a larger recalibration across risk assets, like equities. According to JPMorgan’s report: “Frothy positioning in tech, elevated US real yields, and apprehensions regarding China’s economic trajectory,” were key contributing factors.

Featured image from Unsplash, Chart from TradingView