Bitcoin is a volatile asset. We know this, but people who are afraid of losing their investments always scream murder at the slightest surge. While there are these, there are also those who stay calm and stay invested. And for them, their patience pays off.

At the macro level, this is the time for Bitcoin HODLers.

Bitcoin at its best …

… for long-term investors.

This week, total supply on the exchanges fell to 2.45 million BTC, a level last seen in August 2018. This is the result of the consistent accumulation that the market has been experiencing since March 2020.

This macro accumulation held its course through the 2020 and 2021 rallies and reached its current level.

Bitcoin supply on exchanges | Sources: Glassnode – AMBCrypto

This consistent buying behavior of Bitcoin has resulted in outflows that dominate the exchanges. Periods of inflows were observed around the local high in July 2020 and again during the May crash, but declined to indicate buying.

As a result, an average of 80,000 to 100,000 BTC were bought up between July and September.

Bitcoin exchange net position | Source: Glassnode

Such a pattern can only be expected from a certain group of investors who are largely unaffected by the micro-fluctuations. Long-term owners have continuously topped up their holdings.

And currently, their stocks have hit an all-time high of 80.5% of total circulating supply. Now there were some sell-offs around April as a result of profit-taking. This resulted in a decline to the low high of 67.7% this year.

However, it also underscored LTH’s bullish stance in 2018, which fell to 58% and around 54-56% in 2014.

Bitcoin LTH supply | Source: Glassnode

But why the bullishness?

The bull market we’ve seen in long-term owners this year can be attributed to two phenomena –

  1. Bitcoin’s new ATH on the charts
  2. The overall increased acceptance of Bitcoin

Evidence of the surge in adoption is the growth seen beyond Bitcoin itself, particularly in the Lightning Network statistics. The introduction of Bitcoin in El Salvador may have served as a catalyst, but Lightning Network has long seen greater participation.

Network capacity has increased 170% since January of this year, up 22% this month alone to 2,904 BTC.

Bitcoin LN capacity | Source: Glassnode

This macro-bullism is likely to continue as the adoption of Bitcoin grows with each passing day. People stay in anticipation for the king coin to return to its ATH levels.


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