Despite Bitcoin’s price having dropped by 21% from its all-time high, the majority of the cryptocurrency has stayed dormant in wallets during this period.
Around three-quarters of circulating Bitcoin has remained “inactive” for at least six months, according to data from Glassnode’s Hodl Wave chart, a blockchain analysis tool that tracks the distribution of Bitcoin over time.
On August 11, Glassnode reported that only 45% of Bitcoin had been held long-term during the first half of 2024. However, this figure has now risen to 74%, even though Bitcoin’s price has seen a 21% decline from its peak.
This trend highlights the behavior of long-term investors who continue to hold onto Bitcoin as a store of value, anticipating future price increases. Additionally, it reduces the available supply of Bitcoin on the market, which could lead to upward price pressure as demand increases while supply remains limited.
On August 19, on-chain analyst James Check pointed out in a post on X that over 80% of short-term investors are currently facing losses because their Bitcoin purchase price is higher than the current market price.
He also cautioned that if these investors panic and begin to sell off, it could trigger a sharp price drop similar to past declines. Short-term investors are defined as those who have held Bitcoin for less than 155 days.
Market sentiment continues to be pessimistic, with Bitcoin’s Fear & Greed Index registering at 28 points, the lowest level since December 2022. While Bitcoin’s price neared $60,000 over the weekend, it has now fallen to $58,512 at the time of this report.
Source: analysis unich
