Key Points
- Long-term Bitcoin holders are selling off their Bitcoin, signaling potential market changes.
- Despite recent gains, selling pressure could trigger a downturn in the Bitcoin market.
A significant shift is happening among Bitcoin holders, indicating potential changes in the market. Bid-ask imbalances indicate that selling pressure is dominant, which might lead to a market downturn.
Although Bitcoin’s profitability has diminished following the recent market correction, it has still managed to post a 19.86% increase. However, with a modest 0.37% price increase, there is doubt about Bitcoin’s ability to maintain these gains as selling activity continues to dominate.
Long-Term Bitcoin Holders Begin to Sell
Data from Glassnode shows that long-term Bitcoin holders, except for the “Ultra Long-Term Holders” who have held their Bitcoin for more than seven years, are starting to take profits. Long-term holders are those who have held Bitcoin for over six months (180 days). As per the latest data, the proportion of Bitcoin held by this group has decreased by about 10%, from over 60% to around 50%.
This shift in Bitcoin ownership distribution is shaping the progression of the market. Usually, during the initial stages, long-term and ultra-long-term holders control a significant portion of Bitcoin. However, as selling pressure increases, this balance shifts, giving short-term holders more influence in the market.
Diminishing Interest Among Long-Term Holders
Long-term Bitcoin holders are losing interest faster than expected. This trend is seen among those who have held Bitcoin for 1–2 years, 2–3 years, and 3–5 years, especially those who accumulated during the bear market between June and November. These cohorts are significantly downsizing their holdings, as shown by recent market trends.
The introduction of Bitcoin spot ETFs has added a new dynamic to the market. Institutional investors who have been accumulating Bitcoin over the past months are now starting to sell, with their holdings dropping from 25% to 16%. However, there is still potential for a market rally since long-term holders have not yet sold in large quantities, suggesting they may be waiting for prices to rise further before taking profits.
Recent data from Hyblock indicates a 50% bid imbalance in 1-2% of the order book depth. This imbalance suggests the market is currently in a sell phase, characterized by low demand (fewer buyers) and high supply (more sellers), which puts downward pressure on Bitcoin’s price. Simultaneously, data from CryptoQuant shows an increase in the amount of Bitcoin available on exchanges, with approximately 22,289 Bitcoin being deposited, causing a gradual rise in Exchange Netflow, further contributing to the growing supply of Bitcoin on exchanges.