Positive Signal in Bitcoin Supply: Short-Term Holders’ Share Drops to 23.6%

CryptoQuant data shows that the decreasing share of short-term holders in Bitcoin’s supply may signal a positive opportunity typical of late-stage market cycles, despite weak demand.

In the cryptocurrency market, the supply held by investors who have owned Bitcoin for less than six months is shrinking significantly. According to CryptoQuant, this group consists of short-term holders (STH) who react more quickly to market volatility. The decrease in these holders indicates that selling pressure and short-term market activity are weakening.

According to the data, Bitcoin held for less than a day accounts for 1.2% of the supply, while the segment between one day and one week accounts for 2%, and the segment between one week and one month represents 5.6%. The share between one and three months is at 6.7%, and the three-to-six-month share is at 8.1%. Consequently, the total share of short-term holders has fallen to 23.6%. CryptoQuant notes that this trend was also observed during the final stages of past bear markets.

The share of long-term holders is increasing

The decrease in short-term supply indicates that Bitcoins are beginning to accumulate in the hands of long-term holders (LTH). Long-term holders are less likely to sell their assets during market fluctuations, thus reducing the liquid supply in the market.

However, the data also suggests that demand has not yet returned in a strong way. Every Bitcoin purchased adds a new UTXO record to the short-term holder supply on-chain. When demand strengthens, the STH share rises rapidly, a movement often seen as the market peak approaches. According to CryptoQuant, the current decline in short-term holders indicates a period of high apathy and serves as a positive opportunity signal.