Long-Term-Supply
Tutorial: Long-Term Holder Supply Indicator
The Long-Term Holder Supply indicator measures the total amount of coins held by long-term investors. This metric reflects the behavior of long-term holders (LTHs), providing insights into market confidence, accumulation trends, and potential distribution phases.
Steps to Use the Long-Term Holder Supply Indicator
1. Understand the Concept:
LTH Supply: Represents the total holdings of investors who have kept their assets for an extended period (e.g., more than 155 days).
Relevance: Highlights the confidence and behavior of long-term holders, often considered “strong hands” in the market.
2. Interpret the Long-Term Holder Supply Indicator:
Increasing Supply: Indicates accumulation by long-term holders, reflecting confidence in the asset’s future value.
Decreasing Supply: Suggests distribution by long-term holders, often associated with profit-taking or reduced confidence.
Trend Analysis: Persistent trends in LTH supply provide insights into broader market dynamics and sentiment.
3. Analyze Historical Patterns:
Bull Markets: LTH supply often decreases as long-term holders distribute coins to capitalize on higher prices.
Bear Markets: LTH supply typically increases as holders accumulate during price corrections.
Market Cycles: Significant shifts in LTH supply often align with key market turning points.
4. Make Decisions:
During Supply Increases: Consider aligning with accumulation trends, particularly in undervalued markets.
During Supply Decreases: Monitor for potential market corrections or profit-taking behavior.
Validate Sentiment Shifts: Use changes in LTH supply to confirm broader market trends and sentiment.
Tips:
Combine with Other Metrics: Pair LTH supply with indicators like SOPR, transaction volume, and price trends for a comprehensive analysis.
Track Historical Levels: Compare current LTH supply with historical data to identify patterns and market cycles.
Monitor Significant Changes: Sudden shifts in LTH supply can signal key market events or turning points.
Account for External Factors: Consider macroeconomic conditions and regulatory developments that may impact LTH behavior.
How to Use the Indicator Effectively
Assess Accumulation Trends: Use increasing LTH supply to identify periods of strong market confidence and accumulation.
Identify Distribution Phases: Monitor decreasing LTH supply to detect profit-taking or reduced long-term confidence.
Support Investment Strategies: Incorporate LTH supply data into long-term portfolio management and risk assessment.
Created By: This indicator is a widely recognized tool in blockchain analytics.
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