Glassnode Data Reveals 75% of All Circulating Bitcoin Has Not Moved in Six Months

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Bitcoin has struggled with price volatility for most of August, with price highs and lows triggered by varying events. However, on-chain data suggests that most investors retained their coins despite the depressing outlook.

According to data from Glassnode, three-quarters of BTC’s circulating supply has not moved in the past six months. The Glassnode HODL wave chart, which gives a micro view of Bitcoin wallet holdings based on their last movement, reveals that 74% of BTC have not moved in the past six months. 

Bitcoin Holding Trend Increases Potential for a Recovery Rally 

Despite Bitcoin’s price declining 21% from its all-time high, around 74% of Bitcoin held in wallets remained stationary for most of 2024. This suggests that investors might be holding onto their coins, anticipating future price upticks. 

Notably, holding BTC reduces the supply available to traders, often triggering price increases when demand exceeds supply.

Meanwhile, according to on-chain analyst James Check‘s August 19 X post, over 80% of Bitcoin short-term holders are at losses. This is because they acquired most of their holdings at prices higher than current Bitcoin spot prices.

Right now, over 80% of #Bitcoin Short-Term Holders are underwater, meaning their coin was acquired at a price above the current spot price.

This is similar to 2018, 2019, and mid-2021 which signalled many investors were at risk of panicking, and precipitating a bearish trend. pic.twitter.com/8jM7PBqh5z

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) August 19, 2024

Check noted that the short-term holders’ trend is similar to 2018, 2019, and mid-2021 before a bearish trend. He believes this trend could signal a panic selloff among investors, triggering further downturn for Bitcoin. 

However, Check noted that investors holding a coin below its original price do not show how bad the downtrend is. The analyst explained further that a 1% decline differs psychologically from a 20% price drop.

However…

Just because a coin is held below its cost basis, it doesn't tell us how bad it is.

Being under by -1% is very different psychologically to being under by -20%.

Despite 80% of STH coins being in loss, the magnitude of Unrealised Loss is just 4% of the market cap. pic.twitter.com/aP1KDIUOuj

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) August 19, 2024

According to Check, even though 80% of short-term holders’ coins are lost, the unrealized loss is only 4%. Despite the encouraging remarks, investor sentiment remains bearish, with Crypto Fear and Greed Index dropping to fear levels last seen in December 2022. 

According to Glassnode analysts, the crypto market is facing the largest Bitcoin downtrend in the current cycle. The indecision among investors remains apparent. 

However, there is an increase in BTC HODLing, and an accumulation phase will likely follow. This could help trigger a recovery. 

Reactions to Glassnode’s Bitcoin Holders Analysis Show Rising Optimism 

Digital realtors ManageLife supported Glassnode’s HODL analysis, noting that smart investors are HODLing despite the price changes.

Absolutely! Amidst the turbulence, smart investors are embracing the art of HODLing and accumulating their #Bitcoin reserves for the long haul. @ManageLife understands the power of strategic accumulation in building resilient portfolios. Check out how this strategy shapes the…

— ManageLife – Tokenizing Homes On-Chain (@ManageLife_io) August 14, 2024

ManageLife also noted that strategic accumulation is vital to investors hoping to build long-lasting portfolios. 

Similarly, crypto algorithm trader SpartanQuant stated that investor sentiment is shifting. They believe Bitcoin’s resilience is responsible for the shift to an accumulation phase. 

The trader also claims that HODLing shows renewed investors’ confidence in Bitcoin’s long-term potential.

How is Bitcoin Faring Today?

Bitcoin is in a downtrend trend today after finding support at the $57,900 price level. BTC faced rejection at the $58,900 resistance level, which led to further decline in the past two days.

BTC is trading below the median band of the Donchian Channel (DC), confirming sellers’ dominance. Also, the RSI indicator is neutral at 44.57, approaching the oversold region. 

Although Bitcoin touched $60,000 late last weekend, it has retraced to the $58,000 price level. BTC trades at $58,607, with a 1.9% decline in the past 24 hours. Based on its current price trend, Bitcoin will likely re-test the $57,900 support in the coming days. 

However, the $57,900 support could become BTC’s price pivot for a rebound above $60,000 in the long term.