Long-Term Holders Drive Bitcoin Volatility to Historic Lows
Bitcoin's one-month realized volatility has hit historic lows, according to Glassnode. The analytics firm analyzed 13 variables to determine their impact on volatility variance. Long-term holder supply emerged as the leading explanatory variable, accounting for nearly 19% of volatility variance.
The analysis found that illiquid supply and liveliness, a measure of older-coin spending activity, ranked second and third in explaining volatility variance. Market capitalization, however, accounted for only approximately 3% of the variation.
Long-term holder supply has been increasing, with the cohort reaching an all-time high on July 21, absorbing coins distributed by other market participants and shifting more supply toward holders statistically less likely to spend it in the short term.