Long-term Bitcoin investors are absorbing supply at a historic rate, with wallets designated as accumulators now holding over 4.37 million BTC as of April 7, while a key network index entered a “bull phase” for the first time in nearly a year.

The drop in short-term participant activity signals the network is currently dominated by long-term holders focused on accumulation, crypto analyst Gaah said in a recent analysis. Historically, these periods of low retail activity have represented profitable accumulation opportunities before significant price increases.

Data from on-chain analytics firm CryptoQuant shows the total Bitcoin held by accumulating address cohorts has more than doubled from approximately 2 million BTC in early 2024 to 4.37 million BTC. In contrast, active address momentum, a metric tracking the rate of change in user participation, fell to -0.25 on April 6, its lowest reading since April 2018. The firm’s network activity index simultaneously rose above its 365-day moving average to 3,600, a level classified as a “bull phase.”

This divergence suggests a significant tightening of Bitcoin’s liquid supply is underway. While long-term holders are pulling more coins into storage, inflows from centralized exchanges have slowed from over 1.2 million BTC during expansion phases in 2023-2024 to a recent average of 300,000 to 350,000 BTC. This reduction in short-term trading turnover could create a supply squeeze, potentially leading to heightened price volatility if demand increases.

Long-Term Holders Drive Supply Absorption

The growth in holdings by long-term investors occurred throughout the first quarter of 2026, a period where Bitcoin’s price remained largely capped below $70,000. The data indicates a clear shift in coin distribution, with more BTC moving into wallets with a low history of selling. This sustained supply absorption by patient market participants is a classic precondition for upward price pressure, as fewer coins are available on exchanges to meet new demand.

Network Activity Delivers Mixed Signals

While the headline network activity index has turned bullish, other metrics point to a cooldown in transactional demand. The decline in active address momentum to an eight-year low echoes a similar pattern seen in 2018, which preceded a major price decline. However, analysts suggest the current context is different. The exit of short-term "tourists" leaves a stronger base of holders, reducing sell pressure and creating a more stable foundation for potential growth. The last time the network activity index entered a “bull phase” was in April 2025.

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