Bitcoin Distribution Dynamics Revealed: 9.5% of Supply Acquired at Prices Exceeding $60,000

According to Glassnode's recent analysis, 9.5% of Bitcoin's supply, or 1.87 million BTC, was purchased above $60,000. This acquisition was predominantly made by short-term holders, indicating a notable accumulation of Bitcoin at elevated price levels. Interestingly, a portion of long-term holders who purchased during the 2021 bull run have maintained their positions, potentially benefiting from the recent price increase.

Bitcoin's Distribution Dynamics Unveiled: 9.5% of Supply Acquired Above $60,000

Data released by the renowned on-chain analytics firm, Glassnode, has shed light on the intricate distribution patterns of the Bitcoin (BTC) supply. A substantial 9.5% of the circulating bitcoins, equivalent to 1.875 million BTC, have been acquired at price levels exceeding $60,000.

Supply Distribution Analysis

Glassnode's in-depth analysis reveals a comprehensive breakdown of this distribution. The chart depicting the realized price distribution of the entire circulating supply indicates that 9.5% of the supply has been purchased at prices above $60,000.

Division of Holdings: STHs and LTHs

Within the Bitcoin market, investors are primarily categorized into short-term holders (STHs) and long-term holders (LTHs) based on the holding period of their coins. The distinction between these groups is demarcated at 155 days.

The distribution analysis highlights that the vast majority of the supply purchased above $60,000 falls under the STH category. However, it is noteworthy that some LTHs, who purchased during the 2021 bull run, are also included in this segment.

The presence of LTHs in this high-cost acquisition range suggests that certain investors, despite facing substantial setbacks during the market downturns, have maintained their conviction and held their ground. Notably, as Bitcoin's price recovers, these investors are now approaching or have potentially crossed their break-even point.

Factors Influencing Supply Purchase

The significant proportion of supply acquired at these elevated levels can be attributed to several factors. Firstly, Bitcoin's recent surge in value, which has attracted considerable interest and led to increased buying activity.

Secondly, the inflows into Bitcoin spot exchange-traded funds (ETFs) have also contributed to the acquisition of coins at these relatively high prices.

Role of LTHs in Market Dynamics

Traditionally, LTHs are viewed as the most resolute segment of the market, typically exhibiting a tenacious hold on their assets despite market fluctuations. However, recent data suggests a significant shift in their behavior.

LTH Supply Reduction

Over the past several weeks, LTHs have been observed to actively reduce their holdings, shedding approximately 900,000 BTC since December. This substantial reduction suggests that LTHs, who have amassed significant profits during their long-term tenure, are now capitalizing on the market's recovery by harvesting their gains.

Glassnode attributed around 286,000 BTC from this reduction to outflows from the Grayscale Bitcoin Trust (GBTC).

Bitcoin's Current Market Position

At the time of reporting, Bitcoin is trading at approximately $66,100, indicating a decline of over 3% during the past week. This recent price drop reflects a sharp correction after the asset's rapid ascent in the preceding days.

Conclusion

The distribution analysis conducted by Glassnode provides valuable insights into the dynamics of Bitcoin's supply and the behavior of its holders. The substantial acquisition of supply above $60,000, coupled with the shift in LTH strategies, underscores the evolving landscape of the cryptocurrency market. As the industry continues to mature, these metrics will continue to offer invaluable perspectives on the market's fundamental drivers and potential future trajectories.