Key points
- 75% of Bitcoin hasn’t moved in over six months, showing a strong holding pattern.
- An increase in holdings may reduce the trading supply of Bitcoin, which could push prices up, but CryptoQuant’s report suggests that Bitcoin could face a capitulation from miners.
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Around 75% of circulating Bitcoin has been sitting idle for at least six months, according to Glassnode’s HODL Waves chartwhich provides insight into investors’ holding behavior over time.
The figure represents an increase from last week, when only about 45% of circulating Bitcoin did not move during the same period, Glassnode data showed.
The high percentage of inactive Bitcoin suggests a strong holding tendency among investors, often associated with a strong belief in the future value of Bitcoin.
Bitcoin (BTC) price has fallen more than 10% over the past month, according to TradingView data However, the flagship cryptocurrency has seen a 12% increase over the past six months. BTC is hovering around $58,000 at press time after losing the key $60,000 level.
Since a large portion of Bitcoin has not moved, the liquid supply available for trading has shrunk. This could push prices up if demand continues to increase.
On-chain analyst James Check noted that more than 80% of short-term Bitcoin holders are currently facing losses, having bought at higher prices. He warned that this could lead to panic selling, similar to patterns seen in 2018, 2019 and mid-2021.
Bitcoin miners may not be done selling
CryptoQuant’s Weekly Cryptocurrencies report It was suggested that Bitcoin miner capitulation could occur during the week of August 5, as daily miner outflows increased to 19,000 BTC. Miners could dump their reserves to cope with reduced profit margins, which had fallen to 25%, the lowest level since January 22.
CryptoQuant noted that miners may continue to sell their BTC holdings as they are still underpaid amid falling prices and rising mining difficulty.
“CryptoQuant’s mining profit/loss sustainability metric continues to point to miners being underpaid, primarily because mining difficulty has continued to rise (hitting all-time highs in late July) while prices have declined,” the report wrote.
Miner capitulation events historically align with local price lows during Bitcoin bull markets, as evidenced in March 2023 following the Silicon Valley bank sell-off and in January 2024 following the Bitcoin Spot Exchange-Traded Fund Debuts in the US.
Bitcoin set a record high of $73,000 in mid-March this year before the fourth halfthat was considered different compared to previous cycles.
The overall market sentiment has not improved yet. According to Alternative.meBitcoin’s Fear and Greed Index dropped to 28 on August 19, moving from “extreme fear” seen earlier this month to “fear.”
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