Key Points:
Long-Term Holder (LTH) Bitcoin supply has dropped to 14.54 million BTC, a monthly low, indicating a significant outflow from seasoned investors.
Short-Term Holder (STH) supply has surged to 2.4 million BTC, an increase of 7.96%, signaling a shift in ownership toward newer market participants.
Bitcoin closed the month with an 8.04% gain, reaching a record peak of $123,000, defying typical behavioral patterns seen in previous bull runs.
The 30-day simple moving average (SMA) of new Bitcoin addresses has crossed above the 365-day SMA, a rare on-chain event indicating accelerating user adoption.
Dormant Bitcoin is reactivating at an unprecedented pace: 214,000 BTC has already moved from inactive wallets in 2025, with months still remaining in the year.
The average transaction size of reactivated coins has jumped from 162 BTC to over 1,000 BTC, suggesting institutional-scale movement rather than retail activity.
Despite increased supply entering circulation, prices continue to climb, demonstrating robust demand absorption and structural strength in the market.
This phase does not reflect late-stage speculation but appears to be a foundational reorganization of Bitcoin’s ownership and network activity.
A New Custody Paradigm: The Quiet Transfer of Power
The foundation of Bitcoin’s ownership structure is undergoing a quiet but profound transformation. For years, long-term holders—those who acquired BTC during earlier cycles and held through volatility—dominated the supply landscape. Their wallets, often untouched for months or years, acted as anchors of stability. Now, that stability is shifting. The LTH supply has dipped to 14.54 million BTC, its lowest point this month, suggesting a deliberate exit or redistribution by these entrenched players. This isn’t random selling; it’s a calculated realignment, possibly driven by portfolio rebalancing, strategic exits, or transfers to custodial or institutional vehicles.
At the same time, a new cohort is stepping in. Short-term holders now control 2.4 million BTC, a 7.96% rise in just weeks. These are not the same panic sellers of past peaks. Instead, they represent a fresh wave of investors—some retail, many likely institutionally aligned—who are stepping into positions as others step back. The timing is critical. This transfer occurs amid a price surge to $123,000, a level that historically triggered profit-taking and consolidation. Yet here, momentum persists. The absence of a sharp correction suggests demand is not just keeping pace with supply—it’s absorbing it with ease, indicating deeper market depth than previously assumed.
On-Chain Vitality: A Network Reawakening
Beneath the surface price action, a more telling story is unfolding in Bitcoin’s on-chain metrics. The 30-day average of new addresses has crossed above the 365-day average for the first time in months. This crossover is not just a technical blip—it’s a structural signal. When short-term user growth consistently outpaces the long-term trend, it reflects a reinvigoration of the network’s base layer. New participants are not just observing; they are activating wallets, moving funds, and engaging with the ecosystem in real time.
This resurgence in address creation suggests a broadening of Bitcoin’s user base beyond speculative traders. It may indicate growing integration into financial workflows, increased accessibility through custodial platforms, or renewed confidence in Bitcoin’s long-term role as a reserve asset. Unlike earlier phases where retail interest flared briefly before fading, this uptick shows signs of sustainability. The fact that it coincides with rising prices—and not just preceding them—challenges the old narrative that retail enters only at cycle tops. Instead, new users are participating in the ascent, not just chasing it.
The Return of the Sleeping Giants
One of the most striking developments in recent months is the sudden movement of Bitcoin that had been dormant for years. Data shows that in 2023, approximately 59,000 BTC emerged from long-inactive wallets. In 2024, that figure skyrocketed to 255,000 BTC. Now, in 2025, with several months still unaccounted for, over 214,000 BTC has already been reactivated. This isn’t a trickle—it’s a flood from wallets that hadn’t moved in half a decade or more.
Even more telling is the scale of these transactions. The average size of reactivated transfers has ballooned from 162 BTC to 1,011 BTC per transaction. Such volumes are far beyond the reach of typical retail investors. These are the footprints of whales, early miners, or institutional entities repositioning their holdings. Whether they are shifting to exchanges, cold storage, or new investment vehicles, the act of moving these coins signals a change in strategy. And yet, despite this influx of supply—supply that could easily flood the market and trigger sell-offs—Bitcoin has not only held its ground but surged past $120,000.
Demand Outpacing Supply: A Structural Reset, Not a Speculative Spike
The resilience of Bitcoin’s price in the face of rising supply tells a powerful story. In traditional markets, a sudden increase in available assets typically pressures prices downward. Here, the opposite is happening. The market is digesting large volumes of reactivated BTC while simultaneously welcoming new investors at an accelerating rate. This dynamic points to a fundamental shift in how Bitcoin is being valued and utilized. It’s no longer just a speculative asset traded on sentiment; it’s becoming a core component of global financial architecture.
The average monthly reactivation of dormant supply in 2025 stands at 30,700 BTC—a sixfold increase compared to the same period last year. That kind of growth would normally signal a supply shock. But the absence of price collapse suggests that demand is not only matching supply—it’s pulling ahead. This is not the behavior of a market in its final euphoric phase. Late-cycle tops are usually marked by froth, leverage, and fragile on-chain metrics. What we’re seeing instead is strength: expanding user bases, rising transactional activity, and intelligent capital rotation.
Conclusion
Bitcoin is not merely climbing in price—it is reconfiguring its internal structure in real time. The decline in long-term holder supply, the surge in short-term ownership, the reactivation of dormant coins, and the acceleration of new user onboarding all point to a mid-cycle transformation. This is not a repeat of past patterns, where rallies were followed by rapid sell-offs. Instead, a more mature, resilient, and distributed network is emerging. The current momentum reflects not just speculation, but a systemic rebalancing of custody, confidence, and utility. As the supply map redraws itself, Bitcoin appears to be entering a new phase—one defined not by hype, but by structural depth and enduring demand.
