- There is a notable shift taking place among BTC holders, signaling potential changes in market dynamics.
- The supply-demand imbalance indicated that there was selling pressure, which could potentially lead to a downturn.
Bitcoins [BTC] profitability has declined following the recent market correction, with profits now reduced. According to the latest data, BTC has gained 19.86%.
Despite a modest 0.37% price increase, there is still skepticism about whether BTC can maintain these gains as selling activity continues to weigh on the market.
Long-term holders are starting to sell Bitcoin
Data from Glassnode shows that long-term holders of Bitcoin are engaged in profit-taking activities, except for ‘Ultra Long-Term Holders’, who have held their BTC for more than seven years.
Long-term holders are defined as addresses that have held BTC for more than six months (180 days).
According to the latest data, the BTC share in this cohort has fallen by approximately 10%, from over 60% to approximately 50%.
The changing distribution of BTC ownership is shaping the market’s progress. During the early stages, long-term and ultra-long-term holders typically control a large portion of BTC.
However, as selling pressure increases, this equilibrium shifts.
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This shift is currently giving short-term holders greater influence over the market.
However, until short-term holders account for 70-80% of the market, which hasn’t happened yet, the market will remain in the early to mid-stage.
During the peak of the last bull run, BTC’s split between short-term and long-term holders was around 20% to 80%, respectively.
In contrast, current Coinglass data shows a more balanced market, with both parties owning around 50%.
Long-term holders are losing interest in BTC
Long-term Bitcoin holders are losing interest faster than expected.
This trend has been observed among several cohorts of long-term holders: those who have held BTC for 1-2 years, 2-3 years, and 3-5 years, especially after accumulating during the bear market between June and November.
These cohorts have begun to significantly reduce their holdings, as evidenced by the recent trends in the market chart.
Specifically, the 3-5 year old cohort, which peaked at 15.3%, has since fallen to 13.9%. If selling pressure increases, BTC could see further declines.
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Unlike previous market cycles, the introduction of Bitcoin spot ETFs has added new dynamics to the market.
Institutional investors, who have been accumulating BTC in recent months, are now starting to sell, with their holdings falling from 25% to 16%.
However, there is still potential for a market rally. Because long-term holders have not sold in large quantities yet, this suggests they may be waiting for prices to rise further before taking profits.
The low demand for BTC puts pressure on the price
Recent data from Hyblock shows a bid imbalance of 50% in 1-2% of the order book, as indicated by vertical dots on the chart.
This imbalance suggests that the market is currently in a selling phase, characterized by low demand (fewer buyers) and high supply (more sellers), which is putting downward pressure on Bitcoin’s price.
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Read Bitcoin’s [BTC] Price forecast 2024–2025
At the same time, data from CryptoQuant shows an increase in the amount of BTC available on exchanges, with approximately 22,289 BTC being deposited.
This has led to a gradual increase in Exchange Netflow, which has further contributed to the growing supply of BTC on exchanges.