Long-term Ethereum ($ETH) investors now holding around 78% of the cryptocurrency’s circulating supply, which means that buyers who have been holding onto their funds for more than a year now control the majority of circulating ETH.

That’s according to data from on-chain analysis firm IntoTheBlock, which revealed that long-term holders (LTH) recently added more to their wallets as the price of the cryptocurrency dropped amid a wider market downturn.

These long-term investors are less likely to sell their coins compared to those who have held them for a shorter period. The trend of LTH dominance is seen as a bullish sign for Ethereum, suggesting growing confidence among investors, with the significant concentration they now have effectively taking a significant amount of the cryptocurrency out of circulation, limiting potential downward pressure on the price.

IntoTheBlock’s data reveals a steady rise in the LTH supply throughout the year with a pickup during the recent downturn. It’s important to note, however, that this growth doesn’t necessarily reflect new buying activity, but indicates that some Ethereum acquired a year ago has simply crossed the one-year threshold and is now classified as part of the LTH cohort.

The data comes after a week in which Ethereum-focused investment products saw significant outflows above the $60 million mark while long-term BTC holders have started selling their funds, but long-term ETH holders keep accumulating.

Data shared by IntoTheBlock late last month showed that the behavior of long-term holders is critical to understanding market cycles as historical data “shows that this profit-taking usually begins in the early stages of a bull market and continues past the cycle peak.”

Bitcoin’s influence in the cryptocurrency space means, per the firm, it’s “often the most straightforward asset to use for measuring these cycles” as other digital assets tend to follow the flagship cryptocurrency’s leading.

There’s, however, a notable divergence as long-term ETH holders are currently still accumulating new tokens which “contrasts sharply with their behavior in the last cycle, where it closely mirrored that of Bitcoin holders.”

Featured image via Unsplash.