Decline in Short-Term Bitcoin Holders Could Impact Price Surge, Says CryptoQuant

CryptoQuant, a prominent market research firm, has observed a notable decline in the supply of short-term holders (STH) of Bitcoin (BTC), which may hinder the cryptocurrency's potential price surge.

The firm reports that the 30-day change in Bitcoin’s STH supply has hit its lowest point since 2012, signaling a significant shift in market dynamics.

Short-Term Holders’ Average Buy Price: A Key Indicator for #Bitcoin’s Next Move

“The yellow circles on the chart highlight areas where Bitcoin’s price either broke through or was supported by the average buy price of these 1-3 month STHs, leading to significant price increases.”… pic.twitter.com/uD2ZoaaJYG

— CryptoQuant.com (@cryptoquant_com) September 19, 2024

Currently, Bitcoin is being increasingly held by long-term holders (LTH), who typically accumulate the asset for 155 days or more. While this trend suggests confidence in Bitcoin’s long-term value, the inactivity among short-term holders could be dampening the price momentum.

Julio Moreno, Director of Research at CryptoQuant, noted that historically, Bitcoin has reached new highs when new holders purchase from long-term holders, driving the price up.

He emphasized that while accumulation by LTHs is essential for future price growth, new demand from short-term holders is crucial for a sustained rally.

Moreno stated, “Bitcoin needs fresh demand from short-term holders to sustain a price rally. This is what happens during bull cycles.”