Bitcoin’s price hasn’t been surging as it used to, raising questions among investors. A report from the market research firm CryptoQuant sheds light on the issue, identifying a significant drop in the supply of short-term holders (STH), which could be holding back the cryptocurrency’s explosive price movements.
According to CryptoQuant, the 30-day change in Bitcoin’s STH supply has hit its lowest levels since 2012, signaling a major shift in market dynamics.
The supply of Bitcoin is increasingly shifting towards long-term holders (LTH)—investors who typically accumulate and hold Bitcoin for 155 days or more. While this shift indicates confidence in Bitcoin’s long-term value, the lack of activity from short-term holders may be suppressing the asset’s price momentum.
The Need for Fresh Demand
Julio Moreno, CryptoQuant’s Head of Research, explained: “Historically, Bitcoin reaches new highs when new holders buy from long-term holders, driving up prices.” While accumulation by LTHs is often a precursor to future price increases, fresh demand from STHs is essential to ignite a sustained rally.
According to Moreno, “For Bitcoin to sustain a price rally, it needs fresh demand from short-term buyers. This is what happens during bull cycles.” Without this crucial demand, Bitcoin’s price may struggle to rise as dramatically as it has in previous cycles.
