Key Points
- Long-term Bitcoin holders have re-entered the accumulation phase for the first time since December 2023.
- Bitcoin exchange-traded funds (ETFs) are experiencing a surge in buy-side demand.
Long-term holders of Bitcoin have started to accumulate the cryptocurrency again, a trend not seen since December 2023, according to data from market intelligence firm Glassnode. The data shows that Bitcoin, trading near an all-time high, is in a phase where long-term holders are increasing their holdings.
This accumulation follows a significant divestment phase earlier in the year, which coincided with Bitcoin’s price surge to a new peak of $73,000 in early March. This price increase prompted a wave of selling from long-term holders, resulting in an oversupply and a subsequent consolidation phase for Bitcoin. However, the selling pressure from these holders has recently lessened, leading to a re-accumulation phase.
Changes in Holding Patterns
On-chain analytics firm 0nchained supports the Glassnode data, confirming that Bitcoin holders of over one and two years have ceased selling. The firm states that these cohorts have transitioned from a distribution phase to a holding phase.
Glassnode also highlighted a resurgence in buy-side demand, particularly evident in net inflows into spot Bitcoin ETFs. According to the most recent data, these products have gathered an average of $242 million per day over the past week.
This influx contrasts sharply with the daily selling pressure created by miners since the halving, which averaged $32 million per day. Glassnode’s report explains that the buy pressure from these ETFs is nearly eight times larger than the daily sell pressure from miners, emphasizing the impact of the ETFs and the diminishing influence of the halving.
Market Sentiment and Future Expectations
Glassnode notes that as the market nears new all-time highs and enters price discovery, it is beginning to exhibit signs of the Euphoria phase. This phase is characterized by 93.4% of Bitcoin supply being held in profit and typically lasts 6-12 months. It represents a period where holders are content to hold their Bitcoin, expecting further price increases.
However, despite the positive signs of re-accumulation and bullish sentiment, Glassnode points out that the current Bitcoin bull cycle seems more restrained compared to past cycles. Over the past three months, Bitcoin has seen gains of over 3.3%, 7.4%, and 25.6% weekly, monthly, and quarterly, respectively, on only five occasions out of the last 90 days. In contrast, historical data shows these gains happening more frequently in previous market cycles, indicating that the current market sentiment may be more measured compared to past bull markets.
