Bitcoin (BTC) is flashing strong signals of an impending price surge, with some analysts predicting a climb to $120,000. The bullish outlook stems from a powerful on-chain metric known as the Long/Short-Term Holder Supply Ratio, recently spotlighted by trader Merlijn. This data, sourced from analytics platform CryptoQuant, reveals a growing trend: long-term investors are accumulating BTC while short-term traders exit the market.
This shift isn't just a minor fluctuation—it’s a recurring pattern that has historically preceded major Bitcoin breakouts.
Understanding the Long-Term Holder Supply Surge
The Long/Short-Term Holder Supply Ratio measures the balance between coins held by investors who’ve owned them for over 155 days (long-term holders) and those held by traders in possession for less than 155 days (short-term holders). When this ratio spikes upward, it indicates that long-term conviction is strengthening.
Historically, sharp increases in this metric have acted as leading indicators for explosive price movements. Notably:
- The rally to $28,000 was preceded by a similar surge.
- The climb toward $60,000 followed the same on-chain behavior.
- Even the run-up to $100,000 aligned with this exact pattern.
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Now, the same signal is emerging once again. The ratio has entered positive territory after periods of stagnation in 2023 and 2024—times marked by sideways price action and consolidation. Today’s shift suggests a new phase of accumulation and confidence among long-term investors.
Supply Squeeze Fuels Bullish Momentum
One of the most powerful forces in any market is scarcity. In Bitcoin’s case, when long-term holders refuse to sell, available supply on exchanges dwindles. This creates a supply squeeze—a condition where demand begins to outpace readily available coins.
As short-term traders take profits or exit positions, fewer BTC are listed for sale. Meanwhile, new buyers—especially institutional and high-net-worth individuals—continue entering the market. The result? Increased competition for limited supply, which naturally drives prices higher.
Merlijn emphasized that this dynamic has played out consistently since 2022. Each time the supply ratio surged, Bitcoin responded with a significant rally. With the 30-day change now showing sustained positivity, the foundation appears set for another upward leg.
Bitcoin currently trades just below $110,000. If history repeats itself, the next logical target could be **$120,000**—a level not pulled from thin air but rooted in observable market behavior.
Why $120,000 Is More Than Just a Number
While price predictions can often seem speculative, the $120,000 projection gains credibility through pattern recognition. Analysts aren’t relying on hype or social media sentiment—they’re tracking measurable shifts in holder behavior.
When long-term confidence peaks and short-term volatility subsides, Bitcoin tends to enter parabolic phases. These are rapid, near-vertical price climbs fueled by FOMO (fear of missing out) and amplified by reduced liquidity.
Merlijn summed it up succinctly: “We’ve seen this movie before. The ending? Parabolic.”
That narrative resonates with seasoned crypto observers who remember past cycles. In 2021, many doubted Bitcoin could surpass $60,000—yet it did. In 2024, skeptics questioned whether $100,000 was sustainable. Now, the conversation has shifted to what comes after six figures.
Key Indicators Pointing to a New Bull Run
Several on-chain trends support the idea of an accelerating bull market:
- Declining exchange reserves: Fewer BTC are being held on exchanges, reducing selling pressure.
- Rising wallet activity: More addresses are becoming active, signaling renewed engagement.
- Stable hash rate: Miners remain committed, ensuring network security even at high valuations.
- Increased derivatives open interest: Leverage is building, often a precursor to volatility.
Together, these metrics form a cohesive picture: the market is maturing, and participants are positioning for higher highs.
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Frequently Asked Questions (FAQ)
Q: What is the Long/Short-Term Holder Supply Ratio?
A: It’s an on-chain metric that compares the amount of Bitcoin held by investors for more than 155 days (long-term) versus those held for less than 155 days (short-term). A rising ratio suggests growing long-term confidence.
Q: Has this indicator been accurate in the past?
A: Yes. This ratio has successfully predicted major Bitcoin rallies in recent years, including moves toward $60,000 and $100,000. Its consistency since 2022 makes it a trusted tool among analysts.
Q: What causes a supply squeeze in Bitcoin?
A: A supply squeeze occurs when long-term holders “hodl” their coins instead of selling, reducing available supply on exchanges. When demand remains strong or increases, prices rise due to scarcity.
Q: Is $120,000 a guaranteed target?
A: No price target is guaranteed. However, $120,000 is a data-driven projection based on historical patterns. External factors like macroeconomic conditions or regulatory changes could influence outcomes.
Q: How can I track these metrics myself?
A: Platforms like CryptoQuant and Glassnode provide real-time on-chain analytics. Monitoring holder distribution, exchange flows, and supply concentration can offer early clues about market direction.
Q: Could this signal be wrong this time?
A: While highly reliable, no indicator is foolproof. Unprecedented global events or shifts in investor psychology could disrupt historical trends. That said, the current alignment of multiple signals increases confidence in a bullish outcome.
Market Psychology and the Road Ahead
Beyond numbers and charts lies investor psychology—the invisible hand guiding markets. When conviction grows among long-term holders, it creates a self-reinforcing cycle: fewer sellers mean tighter supply, which pushes prices up, which attracts more buyers, further reducing available coins.
This feedback loop often leads to parabolic moves—rapid accelerations that leave latecomers scrambling to catch up. The current environment shows all the hallmarks of such a phase beginning.
With Bitcoin already nearing $110,000 and on-chain data echoing past breakout conditions, the path to $120,000 looks increasingly plausible.
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