Key Takeaways
Bitcoin’s LTH balances hit cycle lows with -21.5K BTC net change. Low sell pressure and shrinking profits could help sustain upward momentum.
Bitcoin [BTC] rebounded to $122,312 before slipping to $118,440, and traded at $118,631 at press time. That’s a 2.43% daily drop.
Even so, weekly and monthly gains stood at 3.6% and 0.63%, keeping BTC’s broader uptrend intact.
Despite this sustained growth, Bitcoin’s long-term holders are starting to reduce their holdings.
And this could be a break from traditional cycle behaviour. Here’s Why!
Cycle behaviour shows signs of change
According to Sentora, Bitcoin’s long-term holders have been steadily reducing balances during the recent rally and it maybe a move that diverges from past cycles.
Source: Sentora
Historically, LTHs sold more aggressively during bull markets. This time, the process has been slower, even as their combined holdings hit cycle lows.
Source: Checkonchain
Checkonchain data showed Hodler Net Position Change was at -21.5K BTC, at press time, after three months in negative territory, underscoring sustained net outflows from this cohort.
Selling, but without urgency
Interestingly, this distribution coincided with BTC’s push to fresh all-time highs. In previous cycles, sustained LTH selling applied heavier downward pressure.
However, at the time of writing, the Long-Term Holder Sell-side Risk Ratio has fallen for 30 straight days to 0.0010033 — a monthly low and far beneath liquidity risk levels.
Source: Checkonchain
This suggests LTHs currently have little incentive to sell, even with historically high prices in play.
And, the decline in LHS’s Realised Profit evidences this fact.
Source: Checkonchain
Realised Profit by Long-term holders has declined continuously over the past 3 weeks, dropping from 13.8K BTC to 5.6K BTC. A trend that in prior markets often preceded further price appreciation.
Despite falling balances, the selling rate has eased to a three-week low, reducing immediate pressure on price action.
The road ahead for BTC
According to AMBCrypto’s analysis, long-term holders have been slowly reducing their holdings, parting ways with the previous bull market.
Despite falling balances, the selling rate from long-term holders declined to a 3-week low, and the incentive to sell was at a recent low.
Historically, such market behaviour reflects strategic profit taking, and it’s less likely to have a significant negative pressure on price movement.
In this case, if profit-taking picks up again, reaching elevated levels, Bitcoin may face pressure from LTHs and drops on its price charts.
Further downward pressure will see BTC retrace to the next support level around $116K. Conversely, if LTHs reduce profit taking entirely and see balances recover, BTC can reclaim $120,234.
