Bitcoin Long-Term Holders' Costs Rise 9.57% Amid Market Activity

On May 17th, an analysis from COINOTAG revealed a significant increase in the average acquisition cost for Bitcoin Long-Term Holders (LTH), which rose by 9.57% over the past week. This surge is attributed to Short-Term Holders (STH) selling their higher-cost positions and the liquidation of lower-cost long-term holdings. The current average cost for LTH is approximately $31,000, indicating that a substantial number of holdings priced below this threshold were sold off.

LTHs, often referred to as “Diamond Hands,” typically show reluctance to engage in trading unless influenced by significant market factors such as fear or hedging strategies. The absence of panic selling suggests that LTH holders may be proactively adjusting their positions, potentially anticipating a market peak. However, their actions could also reflect uncertainty, possibly leading them to exit prematurely.

Bitcoin's recent price surge above the $105,000 mark has triggered significant activity among its long-term holders. This price movement has led to a notable increase in the cost basis for these holders, as they have been adding to their holdings since April 4th. Data indicates that LTHs have accumulated an additional 339,000 BTC during this period, reaching an all-time high supply. This trend is seen as a bullish signal for the long-term outlook of Bitcoin.

The current market dynamics suggest that Bitcoin's trajectory aligns closely with previous bull runs, such as those seen in 2016-2017 and 2020-2021. Historically, Bitcoin market cycles peak around 1,100 days from their lows. With the current cycle approximately 900 days in, there is potential for several hundred more days of explosive price growth. Investor behavior and market mechanics support the possibility of a Bitcoin supercycle in 2025, with key metrics indicating strong confidence among long-term holders.

The 2-Year Rolling MVRV-Z Score, which accounts for lost coins, illiquid supply, and institutional holdings, shows behavioral similarities to the 2017 bull run. This metric reached a high level of 3.39 when Bitcoin's price hit around $73,000, followed by retracements that mirrored mid-cycle consolidations seen in 2017. The current cycle features multiple high-score peaks, suggesting a potential triple-peak bull cycle, a hallmark of a supercycle.

Long-term holder behavior is also a critical indicator. The 1+ Year HODL Wave, which shows the percentage of BTC unmoved for a year or more, continues to rise even as prices climb. This trend reflects strong long-term holder conviction and suggests that investors expect significantly higher prices in the future. The rate of change in the HODL wave is currently at a neutral inflection point, far from peak distribution, indicating that long-term holders remain confident in Bitcoin's future price movements.

The current market dynamics, including tight supply, steady demand, and institutional investment, support the potential for sustained Bitcoin price expansion. While a repeat of 2017's exponential price growth may be ambitious, the stage is set for a significant rally. Key metrics and investor behavior suggest that Bitcoin is far from topping, with no major signs of capitulation, profit-taking, or macro exhaustion. This sets the stage for a potential rally toward $110,000 or beyond, driven by strong buying on-chain and steady inflows off-chain.