BTC Chip Distribution

Definition ∞ BTC chip distribution describes the spread of Bitcoin holdings across various market participants, categorized by their acquisition price and holding duration. This metric helps analyze the supply-side dynamics of Bitcoin by segmenting coins based on when they last moved on-chain. It provides insight into the cost basis of different investor groups, indicating potential areas of profit-taking or accumulation. Understanding this distribution aids in assessing market sentiment and future price movements.
Context ∞ Bitcoin’s chip distribution is a closely watched on-chain metric for analysts seeking to understand market structure and predict future price action. Current discussions often focus on whether short-term holders are realizing profits or long-term holders are accumulating, which can signal periods of market strength or weakness. News reports frequently reference shifts in this distribution to explain Bitcoin’s price volatility and investor behavior.