Bitcoin Long-Term Holders Have Been Distributing Recently

On-chain data shows the Bitcoin long-term holders have participated in a major selloff recently, a sign that may not be ideal for BTC's price.

Bitcoin’s Long-Term Holders Have Been Distributing Heavily - What Does It Mean for BTC Price?

Bitcoin’s long-term holders have just shown their heaviest profit-taking event of the ongoing cycle, as highlighted by on-chain analyst Checkmate in a new post on X.

Bitcoin LTHs Have Been Moving Their Coins Recently

As on-chain analyst Checkmate explained in a recent post on X, the Bitcoin long-term holders (LTHs) have just shown their heaviest profit-taking event of the ongoing cycle.

The “long-term holders” (LTHs) are defined as those BTC investors who have been holding onto their coins for more than 155 days. This cohort is one of the two main divisions of the sector based on their holding time, with the other group being the “short-term holders” (STHs).

Statistically, the longer an investor holds onto their coins, the less likely they become to sell them at any point. As such, the LTHs can be considered to include the diamond hands of the market, while the STHs consist of the weak hands.

Although the LTHs don’t sell too often, it would appear that the latest price rally has been too good a profit-taking opportunity for even these HODLers to miss out on.

There are several ways to track the behavior of this cohort, with one such being the amount of supply that they are ‘spending.’ Here is a chart shared by the analyst that shows the trend in both the 30-day and cumulative value of this Bitcoin metric since November 2023.

As the graph shows, the Bitcoin LTHs have seen their 30-day spent supply spiking to high levels recently. In total, these investors have shifted around $60 billion worth of tokens during the past month.

Usually, whenever these investors decide to break their dormancy, it’s for selling purposes, so all this movement is likely to correlate to a selloff from the group.

Naturally, with this spike in the 30-day spent supply, the cumulative value of the spent supply has also shot up. In the context of the current chart, this latter metric is tracking the cumulative value of the amount of distribution that the LTHs have been doing since November 2023.

The reason Checkmate has picked this month as the cutoff is that BTC found the bottom of its last bear market in that month following the FTX crash. In other words, the month serves as the start for the ‘current’ cycle of the asset.

At present, the indicator is sitting at $273 billion. This means that the LTH distribution from the past month has made up for about 21% of the entire supply spent since the start of the cycle.

From the chart, it’s apparent that these diamond hands had also participated in a massive selloff in the first quarter of the year and it was perhaps this selling that forced Bitcoin into a phase of consolidation.

Given this trend, it would be interesting to see whether the recent selling would have a similar effect on BTC or if demand this time around is high enough to overcome this obstacle.

BTC Price

At the time of writing, Bitcoin’s price is around $95,500, which shows an increase of more than 8% over the last week.