Bitcoin holders aren’t selling: Number of Bitcoins that haven’t moved in two years hits 3-month low

On-chain data from Glassnode shows that long-term Bitcoin holders are avoiding selling their holdings.

According to Glassnode’s “Percent of Bitcoin Supply Active Over the Last Two Years” metric, the amount of Bitcoin that was last moved two years ago hit a three-month low of 45.364%.

Percentage of Bitcoin supply last active two years ago Source: Glassnode

The trend suggests that Bitcoin holders who bought near the top of the previous bull run in 2018 and before are showing stronger conviction as Bitcoin consolidates above $55,000. Interestingly, the December 2020 peak suggests that many may have sold at breakeven prices around $20,000 or the all-time high in late 2017.

Why is Bitcoin consolidating amidst a bullish scenario with low volatility?

Bitcoin usually peaks or experiences a sharp correction when long-term Bitcoin holders begin to sell rapidly.

In previous bull cycles, selling by holders who took profits on their positions led to a rapid 50% drop, causing the entire cryptocurrency market to correct sharply in the short term.

This trend is consistent with the fact that holders are not selling a large amount of Bitcoin, which suggests that a top is still far away.

Bitcoin’s stabilization around $55,000 is extremely bullish for two main reasons. First, Bitcoin has maintained a strong market structure despite some headwinds. Second, Bitcoin’s tight consolidation below its all-time high is a technically positive sign.

Over the past two weeks, Bitcoin has faced significant threats that could have resulted in a short-term downturn.

In other words, Treasury yields are surging. This typically causes tech stocks to fall, which in turn has a negative impact on all risk markets.

Miners hold a large amount of Bitcoin, which they have not sold in recent months. In fact, compared with the previous pullbacks this year, miners have sold much less Bitcoin. This may indicate that miners may expect higher prices in the future.

Total amount of Bitcoin in all miners’ wallets Source: CryptoQuant

On March 17, Ki also pointed out three other factors based on on-chain trends that could cause Bitcoin’s rally to stall. He wrote at the time:

“I think it will take a while for Bitcoin to rally again in terms of demand/supply. 1/ Too much Bitcoin is held in USD vs. spot trading, not stablecoins. 2/ Bitcoin market cap is too big for stablecoin market cap alone to move Bitcoin higher. No massive USD spot inflows – neutral Coinbase premium, negative GBTC and QBTC premiums.”

Despite the aforementioned risks, Bitcoin has performed relatively well and avoided falling below $50,000.

Has Bitcoin hit bottom?

Well-known anonymous traders, including "Rekt Capital", said there is ample evidence that Bitcoin may bottom in the coming days.

Bitcoin forms higher lows Source: Rekt Capital, TradingView.com

It is difficult to predict when the exact bottom will be formed, but if Bitcoin stays above $55,000 for a few days and shows a “higher low” pattern, a new uptrend could occur. He wrote:

“You never really know when the actual Bitcoin bottom is, but you can look for ways to identify a potential bottom, and if Bitcoin forms a higher low over the next few days, that should be enough to confirm a bottom is in place.”

Therefore, as long as the Bitcoin price remains above $55,000 in the near term, the higher lows formed will remain intact as the market heads into April (a historically bullish month that has not seen a loss since 2015).