Bitcoin’s ongoing price action has sparked intense analysis as it continues to move below the $100,000 mark. Despite reaching an all-time high above $108,000 last week, the cryptocurrency has struggled to maintain upward momentum since then.
Thanks to this performance, on-chain BTC data has been highlighted to reveal the factors that led to the recent selling pressure and investor behavior. One major focus has been the Output Age Ranges (SOAB) indicator, which provides valuable insights into the activity of Bitcoin holders based on their holding periods.
Who cashed out his Bitcoin gains?
According to a CryptoQuant analyst known as Yonsei Dent, Data It reveals that Bitcoin investors who purchased their holdings between six and twelve months ago were the most active sellers during the recent price rise.
This group largely entered the market during the initial excitement surrounding the launch of Bitcoin exchange-traded funds (ETFs) earlier in the year. While this selling activity put downward pressure on Bitcoin’s price, the asset managed to stabilize within the $90,000-$100,000 range.
Interestingly, long-term Bitcoin holders, defined as those who hold Bitcoin for more than a year, showed minimal selling activity. Historical trends indicate that these experienced investors are likely anticipating high price levels before considering making significant profits.
Meanwhile, Dent pointed to the Coin Binary Days Destroyed (CDD) metric that shows a significant decline in legacy Bitcoin transferred in December compared to November. Historically, decreased activity by long-term holders during price corrections often indicates market resilience and the potential for future upward momentum.
The analyst wrote:
The “Binary CDD” indicator at the bottom of the chart shows a decrease in selling of older Bitcoin in December compared to November. This suggests that many long-term holders may be expecting higher prices before selling.
Binance reserves indicate market confidence
Speaking of rising prices, another important metric indicating a significant move in Bitcoin comes from Binance’s Bitcoin reserves, which have been steadily declining since August.
CryptoQuant Darkfost Analyst Highlight Binance’s reserves recently reached their lowest level since January. This trend is important because a similar decline earlier in the year preceded a 90% rise in Bitcoin’s price.
A decline in exchange reserves typically indicates that investors are moving their Bitcoin holdings away from central exchanges and into private wallets.
Such behavior indicates low selling pressure and a preference for long-term holding strategies. Historically, declines in reserves on exchanges often coincide with periods of strong market optimism and rising prices.
Notably, with BTC still currently trading at $95,567, down 2.7% in the past day, the confluence of these factors – long-term holder confidence, reduced activity from legacy wallets, and low exchange reserves – presents a cautiously optimistic picture for the trajectory. Bitcoin in the near term.
However, be warned that sustained buying activity will be required to break through psychological resistance levels and maintain bullish momentum.
Featured image created with DALL-E, chart from TradingView