Bitcoin's rally above the $70,000 mark is being fueled by a less visible shift in market dynamics: a growing concentration of coins in the hands of long-term investors who have historically been reluctant to sell.

Data compiled by Compass Point shows that long-term holders now control 83% of Bitcoin's circulating supply, the highest proportion since December 2023. Moreover, the distribution of holdings is no longer as heavily weighted toward higher price levels as it was near the market's peak. Among investors who purchased and held, only 14% of Bitcoin is currently held at an average cost above $100,000, down from 30% in October of last year. Additionally, 19% of the supply was acquired within the $60,000 to $70,000 range.

Compass Point notes that roughly 19% of Bitcoin's supply carries a cost basis between $60,000 and $70,000, compared with about 15% in a similar price zone during previous bear market bottoms.

Analysts Ed Engel and Michael Donovan of Compass Point wrote in a note that "every indicator we track suggests Bitcoin is in the final stage of the crypto winter." They added that a break above $70,000 would allow short-term traders to flip from losses to profits, potentially generating enough upward momentum to challenge the average holding cost of $76,000 from the prior cycle.

Bitcoin continued its ascent during Friday's Asian trading session, gaining 1.4% to reach $73,700 as of 8:20 a.m. Beijing time.