On-chain data shows that long-term Bitcoin holders have been selling recently as their profits swelled to notable levels following the price surge.
Long-term Bitcoin holders have made huge profits recently
As CryptoQuant community analyst Maartunn explains in a new article mail On X, long-term holders have sold large amounts in the past month. “Bitcoin long-term holders” (LTHs) refer to Bitcoin investors who have held their coins for more than 155 days.
This group includes those with the tightest hands in the market, who rarely sell regardless of whether there is a rally or a crash. These investors contrast sharply with “short-term holders” (STHs), who generally react to any event in the sector.
As such, one can be wary of times when LTHs decide to sell, because it means the market is at a point where even these diamond hands are tempted to part with their old coins.
Bitcoin is currently experiencing one such example, as the rally to unseen highs has forced some LTHs to cash in their hard-earned profits. Below is the chart shared by the analyst which shows the trend in 30-day change of LTH supply.
As shown in the chart, Bitcoin LTH supply recorded a significant negative change over the past month, indicating that these HODLers have broken their silence.
In total, Diamond Hands transferred 827,783 BTC in this window. Naturally, not all transactions correspond to a sale, but in general, there is a high chance that a sale will be the goal when LTHs move their coins.
The reason behind LTH’s sell-off becomes clear when looking at the group’s profit and loss margin. As CryptoQuant author Axel Adler Jr. pointed out in the X Report mailThe group sits on an average dividend yield of 326%.
From the chart, it appears that although Bitcoin LTHs’ profits are high on their own, they are still well below the margin during the 2021 uptrend.
This, of course, does not mean that the current rally also has a lot of room to run, as it is very likely that this cycle will simply result in smaller gains for these diamond hands than last time.
While LTHs have been spending big lately, Bitcoin hasn’t budged much, meaning significant new demand is still flowing into the sector absorbing this selling pressure. However, it remains to be seen how long this balance will be maintained.
Bitcoin price
Bitcoin showed a brief exit from a consolidation phase earlier in the month, but the asset appears to have found its way back into the range with its price now trading around $98,200.