Bitcoin Reaches New All-Time High on This Metric: Details

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Arman Shirinyan

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Long-term holders stopped spending their coins after massive sell-off on cryptocurrency market

While Bitcoin is still consolidating around the first resistance levels reached since the reversal from around $28,500, the on-chain metric shows a new all-time high of 4.45 million BTC being untouched for over five years, according to Glassnode.

The long-term holder supply is one of the best metrics for determining sentiment among long-term investors and those who are considering Bitcoin as a store of value rather than a speculative asset. 

The rising inactive supply could suggest that Bitcoin has actually entered an accumulation phase after active distribution since November. According to the chart, we saw a strong decrease in the inactive supply in the middle of 2021 until now.


Why does inactive supply matter?

The number of inactive coins on the network could act as both a social and market indicator. As mentioned, it is easy to determine sentiment among long-term holders but, in addition to it, the Bitcoin Supply Last Active 5+ years ago may reflect the pressure being put on the market.

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Bitcoin Chart
Source: TradingView

The decreasing number of inactive coins on the network usually correlates with bearish trends on the market as even long-term holders are dumping their coins to either avoid losses or break even on their positions.

The highest spending rate of long-term supply is usually observed around a rally’s tops or during a massive sell-off on the market, when panic prevails among all types of investors. 

With the normalization of long-term supply spending, we saw almost an immediate retrace on Bitcoin, which gained over 10% to its value in the last week. Unfortunately, the rally slowed down as Bitcoin failed to reach the 50-day moving average.

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