BTC Supply Rotation Signals Bullish Momentum

A sharp drop in BTC supply ratio shows long-term holders are distributing. Could this mean a new all-time high is near?

Aurelien Sage July 30, 2025 - 1:30 PM

Graph showing BTC supply rotation between long-term and short-term holders

Bitcoin News

BTC long-term to short-term supply ratio drops 11%
Distribution suggests investor rotation ahead of price moves
Similar patterns appeared before previous all-time highs

In the latest data from Glassnode, the Long-Term Holder (LTH) to Short-Term Holder (STH) supply ratio for Bitcoin has seen a significant 11% decline over the past 30 days. This ratio compares the amount of BTC held by seasoned investors to that held by newer entrants. The drop indicates a clear rotation of BTC from long-term holders to short-term market participants.

This kind of distribution generally reflects confidence among long-term investors in higher prices ahead. By taking profits and moving supply to newer hands, they are not necessarily bearish but instead cycling their holdings as market momentum builds.

A Pattern That Precedes All-Time Highs

Historically, this rotation from LTHs to STHs has occurred before major bull runs. In fact, past Bitcoin all-time highs have often been preceded by a similar reduction in the LTH/STH ratio. This means that current market behavior could be setting the stage for another major move upwards.

Investor positioning seems to be structurally consistent with previous bullish cycles. As new participants absorb the distributed supply, upward price pressure tends to increase if demand holds strong.

The LTH/STH Supply Ratio – comparing $BTC supply held by long-term investors to new entrants – dropped -11% over 30 days, reflecting continued rotation into distribution. This pattern has preceded prior ATHs and highlights a structurally consistent shift in investor positioning. pic.twitter.com/ecUMy58O4X
— glassnode (@glassnode) July 30, 2025

What It Means for Investors

For traders and investors, this pattern is a crucial on-chain signal. It suggests that confidence is returning to the market, and long-term players are leveraging their accumulated BTC to take advantage of rising liquidity. If historical trends hold, the current rotation could be the early signal of an upcoming all-time high for Bitcoin.

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