Long-term Bitcoin holders now have 80.5% control over BTC supply

HODLing sentiment takes center stage amongst Bitcoin and Ethereum investors
“Bitcoin vs. Ethereum” by QuoteInspector.com is licensed under CC BY-ND 2.0
  • Long-term holders hold 80.5% of Bitcoin’s circulating supply.
  • ETH supply on crypto exchanges dropped from 24% to 16% in one year.
  • Whales and institutional investors in accumulation mode.

JAIPUR (Coinchapter.com) – Bitcoin and Ethereum investors turned long-term holders in anticipation of exponential gains soon, data showed. HODLing sentiment remained dominant despite the top two cryptocurrencies showcasing choppy price action throughout September.

Bitcoin Supply Held by Long-Term Holders Hits ATH

The latest data from Glassnode points towards an increasingly bullish development for the benchmark cryptocurrency. As per the Zug-based crypto market analytics firm, long-term holders (LTH) control 4/5th of Bitcoin’s circulating supply. And 71.1% of the LTH crowd has turned a profit on their BTC investment.

Related: Bitcoin whales hold 25% of the BTC supply as other entities keep accumulating

During Bitcoin’s 2017 peak, the number was 58% and 54-56% during the 2013 peaks. A deeper dive into the reasons for the massive spike in Bitcoin holding sentiment points to ongoing inflation concerns. Rising grocery prices and clogged supply chain channels have created panic buying conditions amongst shoppers.

Related: Inflation FUD could send Bitcoin to $45K and Ethereum to $3K, says crypto exchange executive

“Grocers need to plan for the worst. With the system so fragile now, what would happen with further spikes in prices, demand and panic-buying?”

read an excerpt from a latest Bloomberg opinion piece on inflation
No slowdown in rising grocery prices in the U.S
No slowdown in rising grocery prices in the U.S. Source: IRI Consumer Packaged Goods Inflation Tracker

Rapidly increasing inflation implies a gradual depreciation in the purchasing power of the U.S. dollar. Therefore, Bitcoin investors carefully assessed the macroeconomic impact of rising inflation and bullish comments from traditional finance executives to increase their holding size.

Whales also bought the dip triggered by the ongoing crypto crackdown in China.

“Whales bought the China FUD, adding 80,000 #bitcoin to their fat stacks.”

noted market analyst Lark Davis in a tweet

But it’s not just Bitcoin that’s on the mind of investors.

33% Of ETH Supply Circulating On Exchanges Removed

The total supply of Ether (ETH) circulating on cryptocurrency has declined drastically, indirectly hinting at the rising HODling sentiment and long-term belief in Ethereum amongst investors.

“…In the past year, 1/3 of the $ETH supply that was on exchanges, has now been moved off. This is a good sign for patient #hodlers.

Sep. 26, 2020 exchange supply: 24.1%

Sep. 26, 2021 exchange supply: 16.1%”

observed market activity tracker Santiment

The continuous outflow of ETH off exchanges lowered the risk of sporadic price crashes due to selloffs, hence reinstating bullish sentiment around the world’s second-largest cryptocurrency.

ETH supply on exchanges drops to a 34-month low.
ETH supply on exchanges drops to a 34-month low. Source: Santiment

While Bitcoin holding sentiment attributes to rising inflation, rising ETH holding sentiment resulted from the DeFi and NFT ecosystem surge combined with the diminishing supply feature triggered by the London hard fork.

Related: Ethereum (ETH) jumps 10% amid DeFi, NFT activity surge, and on-chain developments.

Technical Setups

Both digital assets are trading in Descending Channel setups and recently bounced sharply from their respective lower trendlines. A near 100% ( read 88%) correlation between Bitcoin and Ether explains why crypto assets trade in tandem.

Bitcoin buyers would need to push the benchmark crypto-asset beyond $46,939 for bullish confidence to return to the BTC/USD pair. For ETH/USD, bulls have to close first above $3,225 and then above $3,522 for the pair to resume a sustained rally upwards.

Bitcoin needs to close above $47,000 for a longer rally
Bitcoin needs to close above $47,000 for a longer rally. Source: BTCUSD on TradingView.com
ETH buyers have to push the asset above $3,522
ETH buyers have to push the asset above $3,522. Source: ETHUSD on TradingView.com

Relative strength index numbers for both BTC/USD and ETH/USD pairs clocked near 50, indicating that a bullish scenario may follow soon. But when that remains to be seen.

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