On-chain data shows that long-term Bitcoin holders have recently begun the distribution phase. Here’s what this could mean for the price of BTC.
Long-term Bitcoin holders sold more than 177,000 tokens
As CryptoQuant community analyst Maartunn noted in a new report mail On X, older coins have recently had a negative balance change. Below is a chart from market intelligence platform IntoTheBlock cited by the analyst, which shows the balance changes for different holder groups on the Bitcoin network.
The groups here are divided based on holding time: investors who bought their coins within the last month fall into the less than 1 month group (in yellow), while those who bought between one and twelve months ago are placed in the 1 to 1 month group. 12 months. Months Collection (Pink).
In the context of the present topic, neither is emphasized; The relevant group is the third group (blue), which contains investors who have held for more than twelve months.
Statistically, the longer an investor holds onto their coins, the less likely they are to ever sell said coins. Therefore, the 12+ collection will include the most determined hands on the grid.
From the chart, it looks like these HODLers were busy accumulating during the 2022 bear market and 2023 recovery high, but the trend saw a turnaround in 2024.
During the first quarter of the year, Bitcoin pool balance change turned noticeably red, meaning that long-term holders were benefiting from their patience.
These diamond hands eventually saw the selling pressure dry up as the cryptocurrency continued to consolidate past a new all-time high (ATH) until its balance change finally reached completely neutral levels.
Recently, with the return of Bitcoin’s bullish waves, the pool’s balance change turned red again, meaning those HODLers have started selling again.
As for what this could mean for the cryptocurrency, perhaps the historical pattern can shed some light. “Long-term shareholder activity is often a contrarian indicator,” says Martin. “LTHs tend to buy (increase holdings) during falling prices and sell (reduce holdings) during rising prices.”
However, it is clear from the chart that while LTHs are timing their sale through the uptrend, the actual top of the cryptocurrency does not occur until its distribution has been long. This could mean that there is room for BTC to go further in the current rally, before the ceiling is reached.
However, something that may invalidate this pattern is the fact that selling volume from LTHs has been less intense this cycle, as IntoTheBlock pointed out in X mail.
“Although long-term holders are selling, it is less aggressive than in previous bull peaks,” the analytics firm notes. Therefore, it is possible that the current Bitcoin cycle is establishing a new market dynamic.
Bitcoin price
At the time of writing, Bitcoin is trading at around $68,800, down more than 3% over the past week.