Glassnode Unveils Bitcoin's Price Top as Long-Term Holders 💎🚀

Bitcoin Long-Term Holders Are Distributing Their Coins

The analytics firm Glassnode has released a report discussing the impact of Bitcoin long-term holders (LTHs) on the supply dynamics of the cryptocurrency. LTHs refer to investors who have held onto their coins for more than 155 days. These individuals are known for their persistent approach, as they tend to hold onto their coins regardless of market conditions. On the other hand, short-term holders (STHs) often react quickly to fear, uncertainty, and hype events by selling their coins.

While it is common for STHs to participate in selling, it is noteworthy when LTHs start distributing their coins. This behavior can have implications for the market since LTHs are typically strong holders who do not engage in frequent selling.

Tracking LTH Behavior with the LTH Market Inflation Rate

Glassnode uses a metric called the “LTH Market Inflation Rate” to track the behavior of long-term holders. This metric shows the annualized rate at which LTHs accumulate or distribute Bitcoin relative to daily miner issuance. It helps identify periods of net accumulation, where LTHs remove Bitcoin from the market, and periods of net distribution, where LTHs add to the sell-side pressure in the market.

A chart displaying the trend in BTC’s LTH Market Inflation Rate over the years shows that historically, the price of Bitcoin tends to reach a state of equilibrium or even a top when LTH distribution reaches its peak.

Implications for the Market

The recent increase in the LTH Market Inflation Rate suggests that we are in an early phase of a distribution cycle. Approximately 30% of this cycle has been completed, indicating that there may be significant activity ahead until a market equilibrium point is reached. This activity could potentially lead to price tops from a supply and demand perspective.