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75% of circulating Bitcoin hasn’t moved in six months: Glassnode

Vaseline August 19, 2024

Key Points

75% of Bitcoin has not increased in value for over six months, indicating strong retention.
More holdings could reduce Bitcoin’s trading supply, potentially driving up prices. However, CryptoQuant’s report suggests that Bitcoin could face a capitulation of miners.

According to Glassnode’s HODL Waves chart, approximately 75% of circulating Bitcoin has been dormant for at least six months. This chart provides insight into investor behavior over time.

This figure is an increase from last week, when only 45% of circulating Bitcoin remained unmoved during the same period, Glassnode data shows.

The high percentage of inactive Bitcoins indicates that investors like to hold Bitcoin. This is often related to a strong confidence in the future value of Bitcoin.

Bitcoin (BTC) price has fallen by over 10% in the past month, data from TradingView shows. However, the flagship crypto is still up 12% in the past six months. BTC is hovering around $58,000 at the time of writing, after breaking the $60,000 key level.

With much of Bitcoin sitting idle, the liquid supply available for trading has been reduced. This could drive prices higher if demand continues to rise.

On-chain analyst James Check noted that over 80% of short-term Bitcoin holders are currently incurring losses, having bought at higher prices. He warned that this could lead to panic selling, similar to patterns seen in 2018, 2019, and mid-2021.

Bitcoin miners may not be done selling yet

CryptoQuant’s weekly crypto report suggested that Bitcoin miner capitulation could occur during the week of August 5, as daily miner outflows rose to 19,000 BTC. Miners may be shedding their reserves to cope with tight profit margins, which had fallen to 25%, the lowest level since January 22.

CryptoQuant noted that miners may continue to sell their BTC reserves as they continue to be underpaid due to the falling price and increasing mining difficulty.

Sapphire

“CryptoQuant’s Miner Profit/Loss Sustainability metric continues to indicate that miners are being underpaid, especially as mining difficulty continues to increase (reaching record highs in late July) while prices have declined,” the report said.

Miner capitulation events have historically coincided with local price bottoms during Bitcoin bull markets, as seen in March 2023 following the Silicon Valley bank sell-off and in January 2024 following the introduction of US Bitcoin spot ETFs.

Bitcoin reached a record high of $73,000 in mid-March this year, ahead of the fourth halving, which was seen as different from previous cycles.

Overall market sentiment has not improved yet. According to Alternative.me, the Bitcoin Fear & Greed Index dropped to 28 on August 19, from “extreme fear” seen earlier this month to “fear.”