Definition: The percent of circulating supply that has not moved in at least 1 year.
Bitcoin’s supply that has remained inactive for over a year has recently seen a decline. This reflects changing market conditions and shifts in holder behavior. At the start of 2024, the percentage of dormant supply was approximately 70%, but by late July, it had decreased to around 66%.
Market Conditions and Holder Behavior
This trend suggests that long-term holders are moving their assets, likely in response to market conditions. Grayscale GBTC holders, in particular, have been distributing their coins following the ETF launch in January.
Historical Correlations with Price Movements
Historically, changes in the dormant supply percentage have correlated with significant price movements. The broader historical chart shows periods of accumulation and distribution, with the current decline indicating increased liquidity and trading activity.
Price Fluctuations and Market Balance
Despite significant price fluctuations during periods of volatility, Bitcoin’s price has mostly remained between $60,000 and $70,000 since February. This suggests a balanced market, even with the increased movement of previously dormant coins.
Adaptive Market Behavior
This shift in holder behavior highlights the market’s adaptive nature following major events, such as the recent halving, which often prompts strategic reallocations among investors.
Bitcoin: Percent of Supply Last Active 1+ years ago: (Source: Glassnode)
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