Bitcoin

Analyst: Long-Term Bitcoin Holders Done Dumping Coins

Published

Bitcoin HODLers and Long-Term Holder Behavior

Bitcoin HODLers seem to have completed profit-taking from their dormant coins following a strong early-year rally. According to a prominent crypto market analyst, the market has likely absorbed a significant portion of the Long-Term Holder supply activated in this recent run.

Insights from TXMCtrades

In a recent post, TXMCtrades mentioned that in every cycle, old supply becomes active at peak levels to compensate for years of risk. The Long-Term Holder cohort is usually in accumulation mode except during parabolic bull runs.

The total coin supply held by long-term holders, defined as coins inactive for 155 days or more, showed a steady increase from July 2022 to January 2024. However, this trend shifted after the introduction of U.S. Bitcoin spot ETFs, attracting significant capital into the market and prompting HODLers to realize their profits.

Long-Term Holder Selling Activity

Since the ETF launch, long-term holders have sold approximately 1.2 million BTC, with a third of these sales originating from the declining Grayscale Bitcoin Trust (GBTC). The Bitcoin ETF primarily comprises long-term BTC holders with lower cost bases compared to newer market participants.

TXMC highlighted that historical data indicates long-term holders tend to refrain from significant buying or selling until the next cyclical breakout, emphasizing the cyclical nature of Bitcoin market movements.

Market Outlook and Potential Bear Scenario

Analysts like James Check have expressed surprise that Bitcoin has not retraced at least 20% from its March highs despite the HODLer sell-offs. Some experts warn that a bear market could ensue if Bitcoin drops below $58,000, a critical level for short-term holders.

While opinions vary on the market’s direction, the consensus is that Bitcoin’s price movements, influenced by long-term holders and market sentiment, will play a crucial role in determining the next phase of the cryptocurrency market.

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