Recent data from Glassnode, as of September 18, reveals that the proportion of Bitcoin’s total supply held by long-term investors is nearing a record peak, at approximately 76%. This comes as the wider cryptocurrency market shows signs of recovery following a period of significant downturn.
Who are the Bitcoin HODLers?
Bitcoin HODLers, often referred to as ‘diamond hands’, are individuals or entities that have held onto their Bitcoin for a minimum of 155 days. Unlike speculators who aim to profit from short-term price fluctuations, these long-term holders maintain their investment regardless of market volatility. The increasing number of Bitcoin held by these HODLers may signal a shift in market sentiment towards a more positive outlook.
Glassnode, a blockchain analytics platform, suggests that the likelihood of these long-term holders selling their Bitcoin after a holding period of five months or more is relatively low. By keeping their coins out of circulation, these HODLers can help to support the overall value of Bitcoin.
The Deflationary Nature of Bitcoin
Bitcoin’s design is inherently deflationary, with a total limit of 21 million coins that will ever be in circulation. As of now, there are approximately 19.49 million coins in circulation. A substantial portion of this number is thought to be lost or irretrievable.
Entities such as Satoshi Nakamoto, the US government, and public companies like MicroStrategy hold a significant portion of the remaining coins. MicroStrategy, a business intelligence company, is currently the publicly traded company with the largest Bitcoin holdings. As of September 19, the company held a staggering 152,800 BTC, which equates to around 15% of the total amount believed to be owned by Bitcoin’s founder, Satoshi Nakamoto.
Bitcoin’s Price Recovery and Market Outlook
At the time of writing, Bitcoin has seen a recovery of approximately 10% from its September lows, steadily rising from support around the $25,200 mark. Despite the current bullish momentum, the overall market trend, as indicated by the candlestick arrangement, remains bearish.
Bitcoin’s price is still largely influenced by the bearish candlestick of August 17, which saw high trading volumes and a significant price drop below $28,000. For now, Bitcoin’s price remains within the trading range established between June and July 2023, with a medium-term buy target set at $31,800, the high point of July 2023.
As prices continue to trend upwards, it’s likely we’ll see an increase in Bitcoin HODLers looking to capitalize on the uptrend before taking profits. Conversely, if prices fall below the primary support level of $25,000, investor sentiment could take a hit.
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