Bitcoin supply-side dynamics and on-chain indicators look to be as strong as ever, but macroeconomic headwinds remain for legacy and risk assets.

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Given the transparent nature of bitcoin ownership, we can view various cohorts of bitcoin holders with extreme clarity. In this case, we are viewing the realized price for the average bitcoin holder as well as the same metric for both long-term holders (LTH) and short-term holders (STH).

The realized price, STH realized price and LTH realized price can give us an understanding of where various cohorts of the market are in profit or underwater. 

On a monthly basis, realized losses have flipped to realized profits for the first time since last April. 

Capitulation and loss taking has flipped to profit realization across the network, which is a very healthy sign of thorough capitulation.

There is a strong case to be made that given the current elasticity of bitcoin’s supply — as evidenced by the historically small number of short-term holders or rather the large number of long-term holders — it will be challenging to shake out current market participants. Especially considering the gauntlet endured over the previous 12 months.

Statistically, long-term bitcoin holders are usually unfazed in the face of bitcoin price volatility. The data shows a healthy amount of accumulation throughout 2022, despite a massive risk-off event in both the bitcoin and legacy market.

While liquidity dynamics in legacy markets should be noted, the supply-side dynamics for bitcoin look to be as strong as ever. All it will take for a significant price appreciation will be a small influx of newfound demand.

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