Bitcoin Held By Short-Term Holders Plunges by $83 Billion in ‘Sign of Growing Confidence’
The flagship cryptocurrency Bitcoin (BTC) has seen its price rise by more than 8% over the past month, defying its historically poor performance in September and its price rise is seemingly leading to ‘growing confidence in the market’.
According to data from cryptocurrency analytics firm CryptoQuant, first shared by popular on-chain analyst Alex Adler, some short-term holders (STHs) saw their holdings move into a state of profit with the recent rise and, as a result, started selling coins.
This has meant there has been a decrease in the amount of Bitcoin held by short-term holders to the tune of 1.31 million BTC, worth around $83 billion, which to the analyst indicates “that fewer BTC are circulating among STHs,” a sign of “growing confidence in the market.”
Some STHs have moved into profit and are selling coins (green circle on the chart), but the decrease in STH supply by 1.31M BTC indicates that fewer BTC are circulating among STHs (HODL), which is a sign of growing confidence in the market. pic.twitter.com/9dItHqZ9e3
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) September 30, 2024
A lower supply of the flagship cryptocurrency being held by short-term holders could suggest that the cryptocurrency’s price could surge in the near future if demand remains steady or grows, as long-term holders are less likely to sell in the near future.
Notably the accumulation comes as the number of Bitcoin being held on cryptocurrency exchanges dropped to a new five-year low after beginning a significant decline earlier this year, to the point that there are now around 2.6 million BTC on these platforms, down from around 3.3 million two years ago.
A lower amount of Bitcoin on exchanges is considered as a bullish signal, as if demand for the cryptocurrency remains steady or rises it could lead to a price rise, given the lowering amount of available supply.
The drop comes at a time in which Bitcoin miners have significantly reduced their BTC reserves, to the point they’re now at their lowest level since January 2021, when the cryptocurrency’s price exploded from around $25,000 to over $69,000 before entering a downturn.
The total amount of Bitcoin held by miners has plummeted to a three-year low as a direct consequence of the recent halving upgrade in April, which halved the coinbase reward miners receive per new block found.
Featured image via Unsplash.
