Original Title: “On-chain Data Academy (2): The Hodlers who are always making money, what is their cost of buying $BTC?”

Original Author: Mr. Begg, on-chain data analyst

This article is the 2nd in the on-chain data classroom series, with a total of 10 articles. It will guide you step by step to understand on-chain data analysis. Interested readers are welcome to follow this series of articles.

Related reading “On-chain Data Classroom (1): Do you know what the average cost of BTC across the entire market is?”

TLDR

• This article will continue the concept of MVRV from the previous one and introduce LTH-MVRV.

• LTH = Long Term Holder, defined as holding BTC for more than 155 days

• LTH-MVRV represents the profit status of long-term holders.

• LTH-RP represents the average cost of long-term holders.

Now let’s get into the main text!

What is LTH?

LTH = Long Term Holder, defined by Glassnode as “BTC held for more than 155 days.”

As for why it is 155 days, Glassnode provides a detailed explanation on their official website; as the content is relatively complex, I will refrain from elaborating here. Interested readers can read it themselves.

LTH-RP Introduction

LTH-RP, which stands for the Realized Price of long-term holders, is their average holding cost. The algorithm divides LTH-Realized Cap by the circulating supply.

As shown in the figure below, light green represents the Realized Price of the entire market, while dark green represents the Realized Price of LTH. The holding cost of long-term holders is usually lower than the average cost of the entire market.

Comparison of Realized Price and LTH-RP

LTH-MVRV Introduction

The profit status of long-term holders is similar to the calculation method of MVRV. The formula for LTH-MVRV is “Current Market Value / LTH-Realized Cap”, which can also be expressed as “Current Market Price / LTH-Realized Price”.

As shown in the figure below, the changes in LTH-MVRV are usually more pronounced than MVRV, because the profits of LTH are usually quite substantial (meaning they tend to be more profitable).

Comparison of MVRV and LTH-MVRV, the orange line is LTH-MVRV, the yellow line is MVRV.

LTH-MVRV’s Bottom Fishing Application

When LTH-MVRV < 1 (or when the market price is below LTH-RP), it means that even long-term holders are on average losing money, and usually, this is a good time to buy at the bottom.

As shown in the figure below, I have marked when LTH-MVRV < 1, which corresponds to almost all cyclical major bottoms. When designing a bottom-fishing strategy, you might consider incorporating this indicator into your considerations~

LTH-MVRV < 1 corresponds to the price

Conclusion

This is the complete content of the on-chain data classroom (Part II). Readers interested in learning more about on-chain data analysis, be sure to follow this series of articles!

If you want to see more analysis and educational content about on-chain data, feel free to follow my Twitter (X) account!

I hope this article has been helpful to you, thank you for reading.

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