Bitcoin Halving 85% Complete, with Supply Held by Long-Term Holders Close to ATH

The cryptocurrency market is entering a very interesting phase. Bitcoin halving, which is expected to take place in mid-2024, is an event that is increasingly capturing the imagination of investors. However, if history rhymes, a mature bull market will not begin until next year at the earliest.

According to the latest data, Bitcoin halving is already 85% complete. At the same time, supply held by long-term holders (LTHs) is close to its all-time high (ATH). In previous cycles, this was a signal of the vicinity of a macro bottom, followed by the early phase of a new cycle.

Supply Held by Long-Term Holders Approaches ATH

The indicator of BTC supply in the hands of long-term holders has historically been a good measure of the health of the cryptocurrency market. Historically, this metric has negatively correlated with the long-term price action of the largest cryptocurrency.

Long-term hodlers keep (HODL) their assets unmoved during market bottoms. Moreover, the largest supply increase in LTH’s hands occurs during violent bear markets (red arrows). This is when investors with strong hands, seeing the price of BTC plummeting, are reluctant to sell. They hold on to their coins because they believe that the cryptocurrency market will bounce back in the future and their investment will prove profitable.

In contrast, the opposite is true during an unraveling bull market. The surge in BTC price causes LTHs to become more and more willing to sell their assets at a profit. Historically, during each major bull market, we have witnessed a dramatic drop in supply held by LTHs. Naturally, the coins then move into the hands of short-term holders (STHs), who join the market at a late stage, driven by the desire to make a quick profit.

Cryptocurrency analyst @therationalroot published a chart of Bitcoin supply in the hands of long-term holders on X. He also superimposed each halving Bitcoin on his drawing. In his chart, we notice first of all the fact that currently, the BTC supply ratio in the hands of LTHs is close to its ATH near 76%. This was set at the end of 2015 when the BTC price ended the accumulation phase before the second halving.