The Bitcoin [BTC] The market has not yet shown a decisive sign of recovery that could justify a bottom. Instead, new indicators are emerging that reinforce the possibility of further downward pressure.
One of those indicators comes from long-term holders (LTHs) – a group defined by wallets that have held Bitcoin for more than 155 days.
This cohort often reflects persuasion capital, and shifts in their behavior tend to carry weight in market analyses.
Historical threshold for long-term holders in focus
Historically, Bitcoin has formed a market bottom when its price fell below the cost basis of long-term holders. That historical relationship is being reexamined.
Cost basis refers to the average purchase price of holders who have owned the asset for more than 155 days. This typically increases over time as new investors move into the long-term holding category at higher price points.
According to data from CryptoQuantThe current LTH cost basis is $38,900, while Bitcoin was trading at $64,890 at the time of writing.
Source: CryptoQuant
If historical patterns repeat themselves, Bitcoin could eventually retest this zone. On average, in previous cycles, prices fell about 20% below the LTH cost basis before a rebound that marked the bottom of the cycle.
However, history does not guarantee a recurrence. At current levels, Bitcoin remains approximately 66.8% above the average cost basis of long-term holders.
That wide range suggests that it would take significant bearish catalysts to force a move toward that threshold.
What are the catalysts?
Long-term holders do not necessarily position themselves bullishly in the short term.
The Binary Coin Days Destroyed (Binary CDD), which tracks whether long-term investors are currently moving dormant coins signals increased activity.
This indicator prints a value of 1 when long-term holders transfer their coins – behavior often associated with distribution or profit-taking.
Source: CryptoQuant
Market data shows that this is the first time since February 18 that the Binary CDD has printed a value of 1. Before that, the last event was on February 10.
The repetition suggests that a period of subdued profit-taking may be coming among long-term participants.
So far the price impact remains limited. Bitcoin recently recovered from a weekly low of $62,510, which was reached on Tuesday after back-to-back selling sessions that started earlier this week.
Long-term holders remain relatively moderate
Despite the recent sell-off, data indicates that long-term holders’ profit-taking remains contained and modest compared to short-term holders’ activities.
Short-term holders – wallets that have held Bitcoin for less than 155 days – are responsible for a larger portion of recent sales. Their spread intensified in the later hours of January 23.
This dynamic becomes clearer when examining the LTH/STH Spent Output Profit Ratio (SOPR), which measures the profitability of the coins issued by each cohort.
Source: CryptoQuant
When the LTH/STH SOPR ratio rises above 1, it indicates that long-term holders are the leading profit takers. A value less than 1 indicates that short-term bonds are dominating the selling pressure.
Until the recent shift, long-term holders had led profit-taking, albeit modestly. The latest data shows that short-term investors are taking control of the sales activities, indicating relative caution among long-term investors.
For now, there is no certainty that Bitcoin will revisit its cost basis for long-term holders. Such a move would likely require a combination of macroeconomic headwinds, negative sentiment and continued selling pressure.
Without these catalysts, the market could continue to consolidate above this historically important threshold.
Final summary
- Bitcoin’s historic short-term cost base levels are drawing renewed attention as long-term holders move assets, which may be available for purchase.
- Recent day’s profit taking has continued to be dominated by short-term holders.