Long-term Bitcoin holders rise for the first time since April lows: Is it a bullish sign?

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On-chain data shows that Bitcoin investors who have held for more than six months have seen supply reverse for the first time in months.

The supply of long-term Bitcoin holders has just recovered.

As Capriol Investments founder Charles Edwards points out in a new post on X, six-month inactive supply recently recorded an increase for the first time since April. This portion of the supply covers tokens that have been dormant (i.e. not involved in any transactions on the blockchain) for at least 6 months and belongs to investors commonly known as long-term holders (LTH).

Statistically, the longer an investor keeps their coins dormant, the less likely they are to sell them in the future. As such, the LTH cohort with relatively long holding times contains the market’s resolute moves. But despite their resilience, these investors have been participating in the sell-off over the past few months. Below is a chart Edwards shared showing trends in supply that has been dormant for more than six months.

As seen in the graph, the drawdown in Bitcoin LTH supply worsened during last month’s crypto crash, indicating that Diamond Hand participated in a significant amount of distribution. However, since this drop, the index appears to have stopped falling, at least for now. This indicator has even increased slightly recently, a potential sign of a change in investor behavior.

One thing to note is that while a drop in LTH supply may correspond to the sell-off currently occurring, the same is not the case for an increase. An increase in the metric does not indicate that members of the cohort are currently buying. Rather, it suggests that some accumulation occurred 6 months ago and those coins have now been held long enough to mature into a group.

That said, this trend is of course still a positive sign for Bitcoin, as it suggests that HODL behavior may become more dominant on the network. The last time such a change occurred was around the crypto lows in April.

What followed that increase in LTH supply was BTC’s rise to an all-time high (ATH). With this in mind, it remains to be seen whether the recent shift to long-term holdings will lead to a similar situation, or if the crypto decline will continue this time as well.