Long-Term Holder Supply Soothes Bitcoin Volatility
Bitcoin's volatility has hit historically low levels, and analysts are pointing to long-term holder supply as a key factor behind the calm. According to Glassnode, an on-chain analytics firm, elevated LTH supply is having a major influence on explaining the subdued volatility.
Glassnode's analysis found that LTH supply showed the closest relationship with changes in Bitcoin's realized volatility, with explanatory power of about 19%. Illiquid supply followed at about 12%.
The firm also noted that market capitalization accounted for only about 3%, and the ratio of futures open interest to market capitalization and spot trading volume had less influence on volatility than LTH supply. This suggests that long-term holders are playing a significant role in stabilizing the Bitcoin market.