A recent report from Bitfinex has shed light on a trend in the Bitcoin market. The report shows despite the unpredictability of the crypto market; long-term Bitcoin holders appear to be playing the patience game, signaling a buoyant outlook on the digital currency.
This resilience and sense of optimism come to the fore as Bitfinex’s Alpha report reveals roughly 40% of Bitcoin’s total supply has remained untouched for over three years, marking an all-time high.
Bitcoin Dormant Supply Hits Record Highs
The latest Bitfinex report illuminates that about 40% of Bitcoin’s supply has not witnessed any movement for more than three years. Based on the Coin Days Destroyed metric, the findings further highlight that this portion of the BTC has remained inactive on-chain.
Analysts at Bitfinex, in a note, deduced that this pattern highlights a prevailing mood of confidence, hinting at possible stability in the face of usual market fluctuations. The analysts noted:
This behavior insinuates a broader sentiment of optimism and potential resilience against market volatilities.
It is worth noting that such a trend can be interpreted as a clear indication that long-term Bitcoin enthusiasts are maintaining a bullish perspective.
Contrasting Metrics: Narrower Timeframes Hint At Bearish Sentiments
While the three-year metric paints a promising picture of enduring confidence, the picture is slightly different when the lens narrows to a one-year timeframe. Within this shorter period, the inactive supply metric points towards a bearish sentiment, hinting at potential price drops.
Bitfinex’s report stated: “Our analysis indicated that movements on this timeframe preceded the price drop.” A case in point is the sudden major Bitcoin fall on August 17, which led to the loss of roughly over $1 billion in liquidations.
This crash plunged BTC’s value momentarily to the $25,000 zone. The analysis by Bitfinex suggests that this crash can be attributed, in part, to the “newer” long-term holders.
According to the report, these individuals, who secured their positions during the bear market, are now experiencing a sense of “unease without succumbing to panic.”
Meanwhile, following the conclusion of the legal battle between the US Securities and Exchange Commission (SEC) and crypto asset manager Greyscale, in which the latter emerged victorious, Bitcoin experienced a notable surge.
BTC is trading above $27,000 when writing and marking a 5.2% increase in the past 24 hours. This news is especially significant considering BTC was hovering just below $26,000 and moving sideways before the announcement.
Featured image from Unsplash, Chart from TradingView