Long-term holders store nearly 75% of all Bitcoins in circulation.next moves from the ongoing rangebound price movement. For context, after ripping to yearly highs during June’s market rally, the king coin has bored market participants, meandering in a narrow zone between $29,000-$31,000.A lot of expert analyses have attributed the lull to investors’ growing inclination to HODL coins rather than liquidate them for gains.
As prices shoot up, so does the temptation to sell and lock in gains. While weaker hands capitulate, the seasoned ones resist the urge. Reserve Risk was ratio of the incentive to sell to the strength of the HODLers. A low Reserve Risk implies that prices are low and HODLer confidence is high. A potential investor sees this as a positive signal to enter the market and purchase Bitcoins. Hence, the current situation signaled that a bull rally could be on the cards.
Historically too, as shown in the above graph, the dip to the green bands was followed by big price moves. This bolstered the perception that BTC was in the early stages of a bull market.Long-term holders have been gaining strength over the past two years, storing nearly 75% of all Bitcoins in circulation as of this writing. As a result, the supply left for active traders, or the short-term holders, has depleted sharply.
BTC’s resilience shown during both crypto and TradFi crises, coupled with clearances from regulators, has paved the way for future investments and growth. As a result, investors increasingly look towards it as a store of value.