• Bitcoin’s illiquid supply has breached the 15 million mark, accounting for roughly 78% of its circulating supply.
• Short-term holders are responsible for over 20% of Bitcoin’s supply and have increased their holdings in the past week.
• Analyzing HODL waves reveals that long-term holders will likely continue to increase as more investors purchase Bitcoin in Q4 2022 and Q1 2023.
Bitcoin’s Illiquid Supply Hits All-Time High
Bitcoin’s illiquid supply has hit a new all-time high of 15.056 million, accounting for roughly 78% of its circulating supply. This means that the majority of Bitcoin is held by long-term investors who have held onto the asset for more than six months.
Short Term Holder Supply on the Rise
An analysis of HODL waves reveals that short term holders, which are those who have held Bitcoin for less than six months, now hold over 20% of the total supply. This cohort bought most of their assets in Q4 2022 and Q1 2023 and is expected to turn into long-term holders if current trends persist.
What Are HODL Waves?
HODL Waves are an analytical tool used to examine different bands or cohorts within a cryptocurrency’s investor base according to when they acquired it and how long they have held it for. This allows analysts to get a better understanding of how much capital is being invested into any given asset over time and whether or not it is being retained by current owners or transferred out to new buyers.
Analyzing HODL Waves
Analyzing HODL waves can be particularly useful when trying to determine the future direction of an asset such as bitcoin since it gives insight into investor sentiment at different timescales and can help identify potential buying opportunities in the market. For example, if we look at bitcoin’s current situation we can see that short-term holders are increasing their holdings while longer term holders are continuing to retain their investments; this suggests that these cohorts may be bullish on bitcoin’s future prospects despite recent price volatility.
Conclusion
In conclusion, Bitcoin’s illiquid supply has reached a record high with 78% accounted for by its circulating supply. Short-term holder supply has also increased significantly in recent weeks which suggests that many investors may be turning bullish on bitcoin despite its volatile price movements recently. Analyzing HODL waves provides valuable insight into investor sentiment at different timescales and can help identify potential buying opportunities in the market moving forward.
