Bitcoin Sees “Hodling” for Dear Life as Coin Movements Freeze
During the bear market, Bitcoin movements as tracked by UTXO show a deceleration in spending.
Wallets large and small are showing reluctance to spend or move Bitcoin (BTC) in a trend which has accelerated with the persistent price stagnation and lower trading activity. The network load remains relatively modest, and BTC coins are simply not used or moved. Unspent Transaction Outputs, a metric based on transactions, peaked in January 2018 and have been sliding ever since. Based on UTXO data, BTC movements indicate a tendency for holding onto coins.
Cambridge, Massachusetts-based Coin Metrics, which also tracks Bitcoin behavior, has released its own data. It covers “old” BTC coins (excluding newly minted units) transferred in the past month and also suggests a decline in movements and spending.
“It tells me we are still in a Bitcoin recession,” Coin Metrics co-founder Nic Carter told Bloomberg.
As much as 40% of Bitcoin’s current supply may be locked away in cold storage. Up to 35% of all BTC is semi-liquid, meaning it surfaces only during bull runs, according to Coin Metrics. A very small percentage is used in a manner suggesting daily transactions and utilization as a means of payments.
BTC prices are stagnating, prompting traders to scrutinize various elements of the network for any indication of renewed positive sentiment.
The Bitcoin Cash (BCH) community actively attempts to discourage hoarding and promote the use of the coins as electronic cash. BCH showed more robust movement, with transactions outpacing the activity on the Bitcoin network. According to Bitinfo, BCH transactions exceeded 671,000 in the past 24 hours.
Altcoins have very different transaction logic, and while some of them are barely used, others see relatively active circulation, especially if used within the context of an app or a distributed ecosystem.