If we use the data from Glassnode believe it, Bitcoin hodling has never been more popular. That is of course potentially a bullish signal for the price. The amount of Bitcoin that has been at the same address for at least one year has risen to 68 percent, while more than 55 percent has been at the same place for two years and 40 percent even for three years or more.
It’s hard not to interpret that kind of data as bullish for the Bitcoin price.
Contrast with the stock market
You would expect the same hodl behavior to be seen in other markets as well. For example, those for shares. But nothing is less true. Where Bitcoin remains at the same addresses for longer and longer, it seems hodl behavior among shareholders correct to take.
When it comes to Bitcoin, according to FundStrat’s Sean Farrell, long-term holding of Bitcoin is growing in popularity. The exception is when market hype builds and investors who bought in for huge profits during the bear market can sell their stacks.
“The trend so far has been bullish in the sense that prices are ahead of the cycle. Any hesitation by long-term investors to sell could result in a mini-supply squeeze,” said Farrell.
We speak of a supply squeeze when there are too few Bitcoin available and the price is therefore subject to a significant upward shock. So this is mainly a bullish development for Bitcoin.
14.46 million Bitcoin
The number of Bitcoin held by long-term holders has also climbed to a new all-time high with the current score of 14.46 million coins. That means there is one little five million of all 19.3 million Bitcoin are not in the hands of investors who are mainly in for the long term.
We clearly see in the data that the army of hodlers is growing, which is a positive signal, especially for the long term. In the short term, it is often difficult to predict Bitcoin’s price development based on this type of data.
There are so many factors that play a role in the course of the Bitcoin price. The fact that more and more people are choosing to hodl instead of actively trading Bitcoin is also evident from the liveness indicator from Glassnode.
It measures to what extent all Bitcoin is ‘alive’ and this indicator has reached its lowest level since December 2020. Usually that is a sign that investors are getting in for the long haul and waiting for better times.