Long-time holders accumulating shows investors are preparing for a BItcoin rally, according to Sam Callahan of Swan Bitcoin.
Old Bitcoin wallets excluding whales are at an all-time high while new addresses are at its lowest since 2018, a sign BTC holders are accumulating as they expect higher prices, analysts at Swan Bitcoin and CrossFi said.
According to Look Into Bitcoin, the number of new addresses reached a bottom of 204,833 on June 7, a number not seen since June 17, 2018. Meanwhile, addresses holding any amount between $1 and $100,000 have reached an all-time high. The only cohort that is still to reach its peak are addresses with more than $1 million.
“This indicates that new entrants have not yet arrived in this cycle despite Bitcoin being near all-time highs and being up more than 150% over the next 12 months,” said Sam Callahan, Senior Analyst for Bitcoin financial services company Swan Bitcoin. “This disparity signals that we are likely still early in this bull cycle,” he told The Defiant.
Accumulating Bitcoin
The figures also tell us another story, that older participants are steadfast in continuing to accumulate Bitcoin, even at all-time high prices.
Behavior like this signals that even though the asset has stagnated in terms of price after reaching its peak of $73,000, the market is in the later phase of an accumulation pattern. And in market cycles, this phase typically comes before a bullish breakout, according to Phillip Alexeev, Chief Growth Officer at CrossFi.
“This phase often results in higher price stability and lower volatility, setting the stage for a potential upward trend when external factors or market sentiment shift,” he explained.
Alexeev also pointed out that the data is less-than-ideal in terms of concentration versus distribution of coins. For a healthier ecosystem, he would like to see broader distribution of coins across wallets of all sizes, but that’s just not happening yet.
HODLers Not Budging
According to Glassnode, roughly 60% of BTC hasn’t moved in a year or more, with holders that have not sold for two years at an all-time high. Simultaneously, investors that trade bitcoin in small time intervals are decreasing –another likely indicator that holders are anticipating higher prices.
For Amberdata’s blockchain researcher Pat Doyle, this “is the behavior of accumulation.”
Doyle counters Alexeev’s views, and does not see it as over-concentration of coins, but in fact takes the inverse position.
“We see a large amount of growth in wallets with smaller balances over time, and growing segments of longer term holders in the HODL Waves,” he told The Defiant. This points to new market participants that are likely to hold their bitcoin for longer periods which would increase the larger buckets in the HODL waves.”
HODL Waves is a website that measures how long investors hold Bitcoin over a period of time.
The Market Is Maturing
What Doyle and Alexeev do coincide on is that the figures are pointing to a maturing ecosystem.
According to Alexeev, current participants are accumulating more Bitcoin, while there are fewer new entrants, which he said is a common trend in mature markets.
“Long-term holders are confident in the asset’s future value and less swayed by short-term fluctuations,” he said.
