Long-Term Bitcoin Holders Are Finished Offloading Their Coins: Analyst
Bitcoin HODLers appear to have completed the process of selling off their long-held coins after a rally earlier this year pushed them into profitable territory, according to a renowned crypto market analyst.
In a recent post, TXMCtrades stated that the market has “likely absorbed the majority of the Long-Term Holder supply we will see activated in this run.” The analyst explained that, as is typical in every cycle, long-term holders bring their dormant supply into play when prices are high, allowing them to cash in on their years of risk.
The behavior of long-term Bitcoin holders has been consistent, with their supply steadily increasing between July 2022 and January 2024. However, the launch of U.S. Bitcoin spot ETFs changed this trend, as it attracted significant investments and drove up Bitcoin’s price, creating an incentive for HODLers to sell and realize their gains.
Since then, long-term holders have sold 1.2 million BTC, with a third of those sales coming from the declining Grayscale Bitcoin Trust (GBTC). The Bitcoin ETF mostly comprises long-term BTC holders who entered the market earlier at a lower cost base, unlike newer competitors whose earliest buyers joined in January.
Historical data shows that the supply held by long-term holders has consistently increased throughout Bitcoin’s history, except during periods of rapid price growth. TXMC believes that long-term holders will not resume significant buying or selling activity until the next cyclical breakout occurs.
Some analysts, including James Check from Lead Glassnode, are surprised that Bitcoin hasn’t yet retraced at least 20% from its March highs despite the recent sales by HODLers. Check suggests that the bear case scenario might be plausible if Bitcoin drops below $58,000, as this is the average cost basis for short-term holders likely to panic sell if their investments turn negative.
Overall, it appears that long-term Bitcoin holders have finished offloading their coins, indicating a potential shift in market dynamics. However, the future course of Bitcoin still remains uncertain, as market participants closely monitor price movements and investor sentiment.