Bitcoin’s long-term holder’s NUPL metric has fallen to levels matching market lows three times since November 2011.
and the rest of the crypto market has been in a bear market for almost a year. The top cryptocurrency saw its market value of more than $900 billion in the aforementioned period, with macroeconomic fundamentals suggesting more pain.
Another bearish cycle produces more BTC hodlers
But the duration of the Bitcoin bear market coincided with a significant increase in the percentage of the total supply of BTC by investors for at least six months to a year.
Notably, the percentage of coins held for at least a year increased from nearly 54% on October 28, 2021 to a record 66% on October 28, 2022, the data shows.
Bitcoin hodl waves. Source: Glassnode
This evidence suggests that long-term investors increasingly see bitcoin as a store of value, says Charles Edwards, founder of digital asset fund Capriole Investments.
“Despite the worst year for stocks and bonds in centuries, bitcoiners never held more bitcoin,” the analyst noted, while highlighting how bitcoin’s long-term holding floor and ceiling rises after each cycle.
Bitcoin hodl waves with long-term BTC holds highs and lows. Source: Glassnode/Capriole Investments
Hodler data hints at Bitcoin price floor
In addition, Glassnode research shows that Bitcoin tokens held for at least five to six months are less likely to be sold. The number of these so-called “old coins” generally increases during bear markets, highlighting the accumulation of patient long-term investors as short-term investors sell.
Related: The Gold vs. BTC shows that Bitcoin is becoming a safe haven: BofA
The difference in behavior is visible in the graph below, where the downward trend in the price of Bitcoin coincides with a persistent decrease in the number of “younger coins” and an increase in the number of coins inactive for at least six months were months, or “old coins”.
Percentage of supply of young (red) vs old (blue) Bitcoin. Source: Glassnode
As of October 31, older coins make up nearly 78% of the circulating bitcoin supply versus 22% of younger coins, reducing the likelihood of a sell-off while forming a potential market bottom.
Moreover, on-chain data that tracks the price of Bitcoin and the net unrealized profits and losses (NUPL) of its long-term holders (LTH) suggest a similar scenario.
LTH-NUPL adjusted for Bitcoin entry. Source: Glassnode
Notably, Bitcoin’s entry-adjusted LTH-NUPL entered the capitulation zone (red), which coincided with the end of previous bear markets, as shown above. That includes the strong bullish reversals seen in November 2011, January 2015 and December 2018.
As Cointelegraph reported, MicroStrategy, the world’s largest corporate bitcoin holder, also reiterated its commitment to continue buying BTC for the long term.
“We have a long-term time horizon, and the core business is not affected by short-term bitcoin price fluctuations,” explained MicroStrategy CEO Phong Le.
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