Bitcoin’s price appeared poised for further declines over the weekend, dipping below the $75,000 mark on Saturday morning. However, the leading cryptocurrency has since recovered somewhat and is attempting to reclaim the $77,000 level as of this writing. Simultaneously, an increase in the supply held by Bitcoin’s long-term investors was observed, though the significance of this signal is questionable.
Why BTC LTH Supply Data Is Potentially Misleading
In a recent post on the X platform, the pseudonymous analyst Darkfost highlighted a surge in the Bitcoin supply held by long-term holders (LTH) over the past few days. However, this apparent rise in LTH activity may not be as indicative of Bitcoin’s growth as the data might suggest.
Citing data from CryptoQuant, Darkfost noted that the long-term holder supply has increased from 15 million to 15.8 million BTC in the last two days. The on-chain analyst pointed out that this metric is among several data points affected by Coinbase’s movement of approximately 800,000 BTC in November 2023.
Between November 22nd and 23rd, the U.S.-based crypto exchange transferred 800,000 BTC, then worth nearly $70 billion, between its internal wallets. As Darkfost explained, this maintenance transfer invalidated old LTH UTXOs (unspent transaction outputs) and created new, but skewed, Bitcoin datasets.
The crypto analyst wrote on X: “As a result, datasets across multiple platforms incorporated this movement, affecting UTXO-based metrics, age and value cohorts, STH/LTH cost basis, realized value, volumes, and more.”
Saturday, May 23rd, marked six months since the Bitcoin transfer, with the moved BTC now fully transitioned from the short-term holder (STH) to the long-term holder supply. Typically, an increase in LTH supply suggests increased accumulation and growing confidence among experienced crypto investors. However, market participants should exercise caution when interpreting this on-chain signal, as it may not accurately reflect an increase in investor demand.
What’s Next For Bitcoin Price?
In a separate post on the X platform, Darkfost identified the next major resistance level for Bitcoin’s price. Highlighting the STH cost basis, the analyst stated that this resistance currently sits just above the $80,000 mark. According to Darkfost, short-term investors appear to be opting to cut their losses rather than holding for a reversal, as evidenced by the resistance Bitcoin faces at their average cost basis. Therefore, the leading cryptocurrency needs a sustained break above the $80,000 ceiling for its recovery to continue.
As of this writing, BTC is valued at around $76,490, reflecting a 1% price increase in the past 24 hours.
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