On-chain data shows that long-term Bitcoin holders have engaged in a significant sell-off recently, a sign that may not be ideal for Bitcoin’s price.
Long-term holders of Bitcoin have been distributed recently
As chain analyst Checkmate explains in a new report mail On X, long-term Bitcoin holders just demonstrated the largest profit-taking event of the ongoing cycle.
“Long-term holders” (LTHs) refer to BTC investors who have held their coins for more than 155 days. This group compensates one of the two main segments of the sector on a waiting time basis, the other group being known as “Short Term Holders” (STHs).
Statistically, the longer an investor holds onto their coins, the less likely they are to ever sell said coins. As such, LTHs can be considered to include the diamond hands of the market, while STHs consist of weak hands.
Although LTHs are not sold very often, it seems that the recent price rise was too good a profit-making opportunity for even these HODLers to pass up.
There are several ways to track the behavior of this group, one of which is how much exposure they “spend.” Below is the chart shared by the analyst that shows the trend in both the 30-day cumulative value and this Bitcoin metric since November 2022.
The value of the metric appears to have been quite high in recent days | Source: @_Checkmatey_ on X
As can be seen in the chart, Bitcoin LTH has seen its 30-day supply rise to high levels recently. In total, these investors transferred about $60 billion worth of tokens over the past month.
Generally, when these investors decide to break their stagnation, it is for selling purposes, so all this movement is likely related to selling from the group.
Naturally, with this rise in 30-day expendable supply, the cumulative value of expended supply also rose. In the context of the current chart, this last metric tracks the cumulative value of the amount of distribution made by LTHs since November 2022.
The reason Checkmate chose this month as the final cut is because BTC found the bottom of its final bear market that month after the FTX collapse. In other words, the month marks the beginning of the asset’s “current” cycle.
At present, the index stands at $273 billion. This means that LTH distribution from last month has made up for about 21% of the total supply spent since the start of the cycle.
From the chart, it is clear that these diamond hands were also involved in widespread selling in the first quarter of the year and it was perhaps this selling that forced Bitcoin into a consolidation phase.
Given this trend, it will be interesting to see whether the recent sell-off will have a similar impact on Bitcoin or whether demand this time around is high enough to overcome this hurdle.
Bitcoin price
At the time of writing, Bitcoin is trading at around $95,500, up more than 8% over the past week.
Looks like the price of the coin has seen a plunge over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, checkonchain.com, chart from TradingView.com