In the ever-evolving world of cryptocurrency, Bitcoin is silently undergoing a seismic shift, with a potential supply shock on the horizon. Recent on-chain data has unveiled a fascinating trend – a significant portion of Bitcoin, approximately 57%, has remained dormant for at least two years. This phenomenon is setting consecutive all-time highs and has caught the attention of crypto enthusiasts and market analysts alike.

This revelation comes from Charles Edwards, the founder of Capriole Investments, who highlighted the extraordinary resilience of Bitcoin investors who have steadfastly held onto their digital assets for more than two years. These “long-term holders” (LTHs), defined as those who have held their coins for at least 155 days, constitute a formidable segment in the Bitcoin market. The 2+ years segment, in particular, represents the most unwavering group of HODLers, embodying the true spirit of diamond hands.

Examining the historical data, a noteworthy chart depicts the upward trajectory of the percentage of the total circulating Bitcoin supply held by these seasoned LTHs. This trend has been on the rise since the FTX collapse and continues to set new ATHs. Although the growth in this metric has slowed recently, around 57% of the Bitcoin supply is currently under the firm grip of these dedicated HODLers.

Edwards suggests that this situation is fostering a substantial supply squeeze in the cryptocurrency market, a pattern reminiscent of the lead-up to previous bull runs, as highlighted by green lines in the chart. What makes this scenario even more intriguing is the recent approval of Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC). Edwards speculates that this development could intensify the supply shock, emphasizing that the ETFs were approved for cash subscriptions, thereby removing more Bitcoin from the market with each purchase.

Taking a different angle on the potential supply shock, chart analyst James V. Straten has drawn attention to the decreasing value of the metric representing the percentage of Bitcoin supply sitting in centralized exchanges’ wallets. The dwindling exchange supply, currently at just 12% of all BTC, implies a reduction in the effective trading supply of the asset. Centralized exchanges, designed for buying and selling activities, are witnessing a decline in stored Bitcoin, indicating a shift in market dynamics.

As we delve into the implications of these trends, it becomes apparent that a supply shock in the Bitcoin market could be imminent. The interplay of long-term holders refusing to part with their digital treasure and the reduction in Bitcoin available on centralized exchanges creates a unique and potentially explosive situation.

This phenomenon is not new to the cryptocurrency space. Historical data, marked with green lines in the chart, suggests that a similar trend has preceded past bull runs, hinting at the possibility of a significant price movement on the horizon. The recent approval of Bitcoin spot ETFs by the US SEC adds an intriguing layer to this narrative. Edwards notes that the ETFs’ approval for cash subscriptions, not in-kind, could deepen the supply shock by taking more Bitcoin off the market with every purchase.

A closer look at the data presented by chart analyst James V. Straten reveals another angle to the potential supply shock. The percentage of Bitcoin supply sitting in centralized exchanges’ wallets has been steadily decreasing, now accounting for just 12% of all BTC. This decline indicates a reduction in the effective trading supply of the asset, as centralized exchanges are primarily platforms for buying and selling. The decreasing exchange supply aligns with the narrative of long-term holders hoarding Bitcoin, creating a dynamic where fewer coins are actively circulating in the market.

Amidst these intriguing developments, the current price of Bitcoin stands at around $45,900, marking a more than 4% increase over the last week. The confluence of factors, including the growing influence of long-term holders, the SEC’s ETF approval, and the declining exchange supply, sets the stage for a potentially transformative period in the Bitcoin market.

As we navigate these uncharted waters, it’s essential to appreciate the significance of long-term holders in shaping the cryptocurrency landscape. Their steadfast commitment and reluctance to part with their digital assets contribute to a unique supply dynamics that could have far-reaching implications for Bitcoin’s future.

In light of these developments, the price of Bitcoin has been on a notable upward trajectory, currently trading at around $45,900 – a more than 4% increase over the last week. The market sentiment seems buoyant, driven by the scarcity of available Bitcoin and the potential for increased demand due to the SEC’s approval of Bitcoin spot ETFs.