Could the reset mid-cycle of Bitcoin be a signal for the start of a new bullish phase?

The Bitcoin market (BTC) is witnessing a significant shift in the supply structure.

The supply from long-term investors (Long-Term Holders – LTH) has decreased to 14.54 million BTC – the lowest level in a month. In contrast, the amount of BTC held by short-term investors (Short-Term Holders – STH) has increased to 2.4 million BTC, marking a 7.96% increase during the same period.

This circulation occurs in parallel with an 8.04% increase in the price of BTC over the month, as the largest cryptocurrency in the market sets a new peak at 123,000 USD. At the same time, the growth momentum of new on-chain wallets is also accelerating, indicating that the Bitcoin network is experiencing a strong revival.

Source: CryptoQuantAccording to the chart, the 30-day moving average (30D SMA) of the number of new wallet addresses has just crossed above the 365-day moving average (365D SMA) – for the first time in months. This is a classic signal reflecting a wave of new users entering the market faster than the long-term trend, indicating strong confidence from retail investors and new participants.

Overall, Bitcoin is gradually transferring its supply to new investors, while activity on the network is becoming increasingly vibrant. This is a stark contrast to previous cycles, when short-term investors typically tended to take profits as soon as the market peaked.

The Bitcoin supply map is being reshaped

Data from CryptoQuant shows a fundamental change in the behavior of the "dormant" supply. BTC that has been "frozen" for a long time is being activated again on a larger scale than before.

In 2023, only about 59,000 BTC from ancient wallets were moved. However, this number surged to 255,000 BTC in 2024, and within just the first few months of 2025, the number reached 214,000 BTC.

Source: CryptoQuantNotably, the average size of each transaction has also surged – from 162 BTC to 1,011 BTC. This indicates that this is not a small retail flow, but likely comes from institutions or large investors with high confidence, bringing BTC back to the market.

On average, each month in 2025, approximately 30,700 BTC will be reactivated – a sixfold increase compared to the same period last year. Despite pressure from supply, Bitcoin continues to maintain an upward trend and surpasses the 120,000 USD mark, indicating that buying demand remains very strong.

In summary, the Bitcoin market is redrawing the supply map in real-time. Long-term investment capital is returning, short-term investors are increasing their influence, and the rate of user expansion on-chain is becoming increasingly clear.

This is not a manifestation of the excitement at the end of the cycle, but a signal of a restructuring mid-cycle – a prerequisite for the next growth phase of Bitcoin.

Mr. Teacher