- LTHs offload BTC and drive huge profits as Bitcoin rose from $44,000 to $100,000 in just a year
- Now the laws of economics are taking over: high supply meets high demand
A year ago, long-term HODLers [LTHs] owned 13.84 million Bitcoin [BTC] at an average price of $42k. Today that is only 12.22 million BTC – a drop of 11% in just one year. These HODLers, known for accumulating when others sell, appear to be changing their behavior.
Is this a red flag or a sign of market maturity?
Let’s rewind to 2023 – BTC started the first quarter at $16.6k, with 14.93 million BTC in LTH wallets. By the end of the year, BTC had risen to $44,000, and LTH supply grew to 15.85 million. Their steady accumulation was key to BTC’s rise on the charts.
Fast forward to 2024, and we see a dramatic shift. LTHs entered a mass distribution phase, with holdings falling from 15.8 million to 14.27 million in the fourth quarter alone. It is clear that these HODLers have benefited from the Trump trade and made huge profits.
Source: CryptoQuant
After BTC’s incredible 502% price increase in two years, it’s no wonder these HODLers are cashing out now. And with Bitcoin becoming increasingly influenced by macro trends, this move is starting to make perfect sense.
However, LTHs are known for their ‘contrarian’ strategy: buying when others are panicking. Their departure is therefore a sign that the market is maturing. Or could it be a red flag indicating trouble ahead for Bitcoin?
LTHs Depart – Will BTC Survive the Fallout?
Recently, Bitcoin showed a red candlestick and fell to $89,000 – a level not seen since mid-November. However, in a stunning turnaround, it quickly recovered to close the session at $95k.
Major institutions are stepping in to absorb the pressure. Take MicroStrategy (MSTR) for example: just two weeks into 2025, they have already made two major BTC purchases. Their latest purchase of 2,530 BTC for $243 million played a key role in Bitcoin’s recovery.
These LTHs are undoubtedly sticking to their contrarian strategy, proving they are ready to take advantage of market downturns.
But here’s the catch: Bitcoin’s Long-Term Holder (LTH) SOPR has shown a pattern of diminishing returns after each halving. As the supply of Bitcoin shrinks, LTHs see smaller gains.
In 2013, the average LTH SOPR was 9.72, but by 2021 it had dropped to 3.87. If this trend continues, we could see a further drop to just 2.44 in 2025.
Source: Glassnode
Technically, LTHs face a choice in this scenario: accumulate more BTC to make the same profit, or quit before the pressure mounts. It seems many are choosing to leave.
Read Bitcoin’s [BTC] Price forecast 2025-26
It is clear that the pressure is increasing. To prevent a huge downturn, a supply shock may be necessary. And right now, that responsibility lies in the hands of these major players.