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.
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.
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.
