Key Takeaways
Bitcoin’s long-term holder supply climbed to 15.26 million BTC as of May 17, with investors adding 316,000 BTC in 30 days ahead of critical Federal Reserve meeting minutes that will shape summer risk appetite.
“The supply held by Long Term Holders (LTHs) continues to increase as investors keep holding their BTC,” CryptoQuant analyst Darkfost wrote in a recent report, noting the renewed accumulation.
The accumulation marks a sharp reversal from late November, when LTH wallets shed roughly 650,000 BTC over a similar 30-day period. The trend is counterbalanced by signs of short-term weakness, including nearly $1 billion in weekly outflows from U.S. spot Bitcoin ETFs and an Estimated Leverage Ratio climbing toward 14.9 percent, according to CryptoQuant data.
Traders are now focused on the upcoming Federal Open Market Committee (FOMC) minutes release on Wednesday, the last under Jerome Powell's tenure as Fed Chair. The minutes, covering the April meeting where rates were held at 3.50-3.75 percent, could signal the Fed's future inflation tolerance and influence Bitcoin’s direction as it tests a critical support zone between $78,000 and $79,000.
The renewed buying from long-term holders—defined as wallets that have held Bitcoin for more than 155 days—points to high conviction among seasoned investors. This cohort absorbed 316,000 BTC in the month leading up to May 17, a stark contrast to the distribution seen six months prior. As of this writing, Bitcoin was trading near $78,047, down 0.17 percent in the last 24 hours.
A further 800,000 BTC transferred from Coinbase last year is set to cross the long-term holder threshold on May 23, an aging effect that could amplify the on-chain supply metric.
However, other indicators suggest a more fragile market structure. The negative Coinbase Premium and nearly $1 billion in weekly outflows from spot Bitcoin ETFs point to waning institutional demand from the U.S. "Healthy bull markets are typically driven by spot demand, not derivatives activity," noted CryptoQuant analyst Axel Adler Jr., who flagged the elevated leverage risk.
The market's near-term direction will likely be influenced by the Federal Reserve. Minutes from the April 28-29 meeting, set for release Wednesday at 2 p.m. ET, will be parsed for clues on the central bank's path forward under new Chair Kevin Warsh.
The April meeting was notable for its four dissents, the largest split since 1992, showing a committee divided on policy. While the committee held its target range at 3.50% to 3.75%, some officials pushed for a cut while others opposed the statement's perceived easing bias. Analysts at Yardeni Research expect the Fed to "signal a tightening bias at the June meeting... followed by a 25bps FFR hike at the July meeting."
This macroeconomic uncertainty puts Bitcoin in a precarious position. A breakdown below the $78,000 support level, which coincides with the Short-Term Holder Realized Price, could trigger a cascade of liquidations given the high leverage in the system. Conversely, a dovish tone from the Fed minutes could stabilize risk assets and allow the bullish on-chain supply dynamics to dominate.
This article is for informational purposes only and does not constitute investment advice.
