Bitcoin’s supply, which was last active over a year ago, reached an all-time high this month, standing at 65.7%.
More than just Bitcoin’s price can be used to determine the strength of the crypto market. Addresses that hold BTC as a long-term investment form the foundation of the Bitcoin market and hold the fort during periods of high volatility.
The amount of BTC held as a long-term investment can be determined by the frequency with which its circulating supply changes.
The longer a portion of the circulating supply remains dormant, the stronger the market becomes, because addresses holding these coins frequently form a strong support for Bitcoin’s price.
Looking at Bitcoin supply that hasn’t moved in more than a year reveals what the industry refers to as diamond hands, the most tenacious holders.
According to data, Bitcoin’s supply, which was last active over a year ago, reached an all-time high this month and is now at 65.7%.
The current percentage is even higher than the figures from May 2022, when the crypto market experienced unprecedented volatility.
The fact that 65.7% of Bitcoin’s supply has been dormant for more than a year demonstrates that a record number of addresses are still holding their coins during the bear market.
According to the data, the majority of the supply that is now dormant was accumulated between May and July 2021.
At the time, the price of Bitcoin plummeted as almost all large miners were forced to close their operations and leave China.
Accumulating BTC during stressful and uncertain times demonstrates a strong belief in the market that appears unshaken by price declines.
The market only sees these diamond hands exit their positions during bull runs. The accumulation and distribution cycles that occur during bear and bull markets support this.
The most recent market downturn wiped out nearly 75% of Bitcoin’s value, erasing any potential profits these older coins could have made.
During bear market cycles, however, addresses holding coins for more than a year almost always refuse to sell at a loss and instead choose to ride out the storm until the next bull run. When the bull market arrives, these addresses will be the ones distributing their tokens in order to profit.
To read our blog on “British engineer has a hope to recover his drive having 7500 Bitcoins,” click here