60% of BTC Supply Remained Dormant Through Latest Volatile Period

By Dale Warburton January 27, 2022 In Bitcoin, Crypto News, Markets

Following the recent drawdown crypto markets, Bitcoin moved strongly into oversold territory, suggesting conviction might have been on the decline. HODLers, however, didn’t get the message, as on-chain analytics shows over 60 percent of supply hasn’t moved in a year.

Illustration of declining ratio between younger to older coins. Source: Glassnode

Long-Term Holders Retain Conviction

Despite Bitcoin’s negative price action reflecting a 50 percent decline from its November high, it’s telling that much of Bitcoin’s holder base has remained unperturbed. This tends to suggest that most Bitcoin holders have strong conviction, enough to see them through periods of extreme price volatility.

One metric illustrating this is age distribution bands, also known as “HODL waves”. Aside from illustrating when various age group bands last moved, it also provides clues regarding broader macro adoption trends.

As illustrated below, over 60 percent of supply has been dormant for more than a year.

BTC HODL waves. Source: Coin Metrics

Minnows Continue to Accumulate

Another optimistic indicator outside of HODLers’ refusal to sell is that addresses holding small amounts of BTC continue to accumulate. As illustrated below, addresses holding between 0.001 and 0.1 BTC have increased from approximately 13.5 million to 16 million since the beginning of 2021:

Number of small holder addresses for BTC and ETH. Source: Coin Metrics

For those feeling particularly uneasy at the recent price action, the indicators above must surely provide some much needed “hopeium”.

Dale Warburton

Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

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