Bitcoin Long Terms Holders Peak as Small Addresses FOMO Into BTC After Its Return Above $20k

Key takeaways:

• The number of long-term Bitcoin holders has hit an all-time high, with long-term investors holding 28% of all available BTC
• The number of small Bitcoin addresses has seen a big surge after Bitcoin reclaimed the $20,000 price level in mid-January
• Bitcoin is currently up more than +38% since the start of the year

Fear and Grid Index shifts to greed as investor optimism returns

After months of bearish sentiment in the crypto market, the start of 2023 has brought a healthy dose of optimism. The Fear and Grid Index, a measure of crypto market movements and a gauge of whether assets are fairly priced, has returned above 50, after being under that level for most of 2022. 

According to a crypto analytics company Santiment, 620,000 small Bitcoin addresses (that is 0.1 BTC or less) have joined the network since January 13th, the day when Bitcoin price reclaimed the $20,000 level for the first time after the collapse of the FTX cryptocurrency exchange in early November 2022.

🧐 There have been ~620k small #Bitcoin addresses that have popped back up on the network since #FOMO returned on January 13th when price regained $20k. These 0.1 $BTC or less addresses grew slowly in 2022, but 2023 is showing a return of trader optimism. https://t.co/CUAS0nV23x pic.twitter.com/wo8NBDNXs3

— Santiment (@santimentfeed) February 6, 2023

With the recent bump, the total number of these small Bitcoin balances increased to 39.8 million, the highest since November 19th.

In addition to new addresses, there has also been a new record reached in terms of long-term holders. According to blockchain analysts Glassnode, the share of Bitcoin held by long-term holders has hit an all-time high of 28% of all Bitcoin in circulation.

BTC supply last active by age. Image source: Glassnode

It is worth noting that the long-term supply of Bitcoin has been steadily increasing since 2014, but it is still an encouraging sign that the trend prevailed during the 2022 crypto winter. The Glassnode researchers commented on Bitcoin’s strong performance in January:

“Bitcoin markets have seen the strongest monthly price performance since Oct-2021, fuelled by both historic spot demand, and a sequence of short squeezes.”

At the time of writing, Bitcoin is trading just shy of $23,000, up more than +38% since the start of the year. Check our Bitcoin price prediction to see where it could be headed next.