CryptoQuant, a leading market research firm, has detected a significant drop in the supply of short-term holders (STH) of Bitcoin (BTC), which it notes could pose an obstacle to the cryptocurrency’s price boom.
According to the company, the 30-day change in Bitcoin's STH supply has reached its lowest levels since 2012, indicating a major shift in market dynamics.
Bitcoin supply is increasingly shifting toward long-term holders (LTH), investors who typically accumulate Bitcoin and hold it for 155 days or longer. While this shift signals confidence in Bitcoin’s long-term value, the lack of activity from short-term holders may be suppressing the asset’s price momentum.
“Historically, Bitcoin has been rising to new highs as a result of new holders buying from long-term holders and driving up the price in the process,” said Julio Moreno, Director of Research at CryptoQuant. He explained that while the accumulation of LTHs is usually a prerequisite for future price appreciation, fresh demand from short-term holders is necessary to trigger a sustainable rally.
According to Moreno, “Bitcoin needs fresh demand from short-term holders to sustain a price rally. This is what happens during bull cycles.”
*This is not investment advice.