Bitcoin dormant supply hits 4-year low as OG selling pressure eases

Long-term Bitcoin holders have stopped selling, with dormant supply movement falling to its lowest level in nearly four years — a pattern that historically precedes price appreciation.

Dormant Bitcoin movement fell to its lowest level since the third quarter of 2022, data from Galaxy Research shows, suggesting long-term holders have halted distribution after a period of heavy profit-taking.

"Earlier spikes in coin days destroyed were driven by OGs taking profit, similar to the pattern seen during Bitcoin's 2017 bull market," Alex Thorn, head of firmwide research at Galaxy, said. "That activity has now subsided."

The coin days destroyed metric, which gives greater weight to older coins when they move, showed a parallel decline. Dormant coin movement tracks Bitcoin that has remained untouched for extended periods before being spent again. Increased activity from long-term holders has historically coincided with periods of profit-taking and heightened selling pressure, while subdued activity suggests those investors are holding rather than distributing their coins.

The slowdown in distribution removes a key source of overhead supply at a time when Bitcoin is trading near $62,700, roughly 50% below its October 2025 peak of $126,000. With exchange reserves already at 2.73 million BTC — the lowest share of total supply since 2017 — the combination of shrinking liquid supply and reduced holder selling creates conditions that have historically preceded the next upward leg.

The on-chain data aligns with broader metrics suggesting the market has entered an accumulation phase. Bitcoin's adjusted spent output profit ratio, or aSOPR, stands at 0.972, below the 1.0 threshold that would signal the start of a new bull market, according to Glassnode. The MVRV ratio — market value to realized value — has fallen to 1.13, approaching the sub-1.0 levels that marked bottoms in December 2018, March 2020, and November 2022.

Exchange reserves have declined steadily since 2024, falling from more than 3.2 million BTC to around 2.73 million BTC. Only 6.6% of the total Bitcoin supply now sits on exchanges, the lowest level since 2017, according to Santiment. Analysts describe this as one of the most encouraging signals for long-term growth, as it reduces the pool of coins available for immediate sale.

The hash rate, a measure of total computing power securing the network, remains near record levels at approximately 929 EH/s, suggesting miners continue to invest in infrastructure despite the price decline. Meanwhile, stablecoin balances on exchanges have reached $180 billion, providing a large pool of liquidity that could quickly flow into the market.

What Comes Next

The key question is what could reignite demand. ETF flows, which turned negative in 2026 with net outflows of about 120,000 BTC, showed an early sign of reversal in July when BlackRock's IBIT attracted $292 million in fresh inflows, ending an eight-week run of outflows. A sustained trend of three to four consecutive weeks of net inflows would provide a stronger signal that institutional capital is returning.

Macro conditions remain a headwind. The Federal Reserve has held interest rates at 3.50% to 3.75%, and markets are pricing in a 79% chance of another rate hike rather than a cut. Bitcoin has historically performed best in an environment of abundant liquidity, and a shift in Fed policy could act as a powerful trigger.

For now, the data points in one direction: long-term holders are accumulating, not distributing. Dormant supply is at multiyear lows. Exchange reserves are shrinking. And the hash rate remains strong. The market is waiting for a trigger — but the structural setup is increasingly favorable for those with a multiyear horizon.

This article is for informational purposes only and does not constitute investment advice.