- A decline in active sales from long-term holders left sellers exhausted
- The increase in ownership of the largest whales as prices plummeted can be seen as a sign of confidence
Bitcoin [BTC] quickly fell back from the $69,000-$70,000 resistance zone. The weekly time frame developed a bearish structure, and the FOMC meeting fell bullish hopes of an interest rate cut by the Fed in September.
Furthermore, the Sahm rule seemed to confirm economic weakness and open the possibility of a recession. This panicked the markets and BTC plummeted.
The $60,000 region is a key support zone, but there are no guarantees that the bulls will successfully defend it. AMBCrypto took a closer look at on-chain metrics to better understand long-term holder sentiment.
The selling pressure from long-term holders has decreased
In a message on X (formerly Twitter) crypto analyst Axel Adler noted that active selling from long-term holders had declined. Compared to early June, the selling pressure from this group of holders was ‘minimal’.
Long-term supply also fell dramatically. This indicated intense profit-taking activity as BTC traded around the $68k-$70k levels. It indicated a lack of conviction of a breakout beyond $70,000.
On the other hand, this could also be positive news as it will likely exhaust the selling pressure.
The behavior of the whale cohort is exciting news
The cohort of wallets with 100,000 to 1 million BTC in their wallets climbed higher as a percentage of the total. The last time it jumped this fast was in May 2023, when Bitcoin started poking its head above the $26,000 resistance.
While this accumulation of whales is encouraging, other whale cohorts have also been sold. The 1k-100k division saw a sharp decline in their holdings over the past two weeks, demonstrating whale selling pressure.
Evidence of bearish sentiment in recent months was also seen in the adjusted SOPR. The value was above 1 to indicate that coins were sold at an average profit.
Unfortunately, the downward aSOPR trend has been a bearish signal since March.
Read Bitcoin’s [BTC] Price forecast 2024-25
Overall, the decline in active sales of LTH, combined with the accumulation of larger whales, is encouraging. However, despite these positives, Bitcoin could struggle to recover in August due to bearish market-wide sentiment.