The rest of the cryptocurrency market has been in a bear market for about a year. The major cryptocurrency saw its market capitalization drop by more than $900 billion in the cited period, with the macro fundamentals pointing to more pain ahead.
Another Bear Cycle Produces More Bitcoin Scammers
But the duration of the Bitcoin bear market has coincided with a significant rise in the percentage of the total supply of BTC that investors have held for at least six months to one year.
Notably, the percentage of coins held for at least one year rose from about 54% on October 28, 2021, to a record high of 66% on October 28, 2022, the data shows.
Bitcoin hoddle waves. Source: Glassnode
This evidence indicates that Bitcoin is increasingly viewed by long-term investors as a store of value, asserts Charles Edwards, founder of digital asset fund Capriole Investments.
“Despite the worst year for stocks and bonds in centuries, Bitcoiners are not holding on to more Bitcoin,” the analyst noted while highlighting how the long-term floor and ceiling in Bitcoin increases after each cycle.
Bitcoin Hoddle Waves feature long-term Bitcoin bearing highs and lows. Source: Glassnode / Capriole Investments
Hodler Data Indicates Bitcoin Price Drop
In addition, Glassnode research shows that Bitcoin tokens that have been held for at least five to six months are unlikely to sell. The number of so-called “old coins” usually rises during bear markets, highlighting the buildup by long-term investors sick as short-term investors sell off.
Related: Gold and BTC Correlation Signals, Bitcoin Become a Safe Haven: BofA
The behavioral divergence is shown in the chart below, as the downtrend in the bitcoin price coincides with a steady decline in the number of “newer coins” and an increase in the number of coins that have been inactive for at least six months, or “old coins.”
The percentage of bitcoin (red) versus the old supply (blue). Source: Glassnode
As of October 31, older coins make up roughly 78% of the bitcoin supply in circulation versus 22% for younger coins, reducing the likelihood of a massive sell-off while forming a potential market bottom.
Moreover, on-chain data tracking Bitcoin price and long-term net unrealized profit and loss (LTH) for holders (NUPL) suggests a similar scenario.
LTH-NUPL modified with bitcoin. Source: Glassnode
Notably, Bitcoin’s LTH-NUPL entered the capitulation zone (in red) that coincided with the end of the previous bear market, as shown above. This includes the strong bullish reversals of November 2011, January 2015 and December 2018.
As Cointelegraph reported, MicroStrategy, the world’s largest bitcoin holder, has reiterated its commitment to continue buying bitcoin for the long term.
“We have a long-term time horizon, and the underlying business is unaffected by near-term bitcoin price volatility,” explained MicroStrategy CEO Fong Lu.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.