63K Bitcoin Shifted from Long-Term Holders to Short-Term Buyers: A Wave of Speculative Purchasing

63K Bitcoin Exits Long-Term Wallets: A Surge of Speculative Short-Term Buying

Bitcoin is currently facing challenges as it struggles to regain momentum below the crucial $90,000 mark. The market is experiencing significant selling pressure, contributing to a surge in fear among investors. Many experts are beginning to suggest that we might be entering a new bear market, especially after Bitcoin reached its peak around $126,000 in early October. Since that high, momentum has decreased sharply, and investor behavior is leaning toward a more cautious approach.

A new report from CryptoOnchain, shared via CryptoQuant, uncovers a noteworthy occurrence in the cryptocurrency market: a significant transfer of 63,000 BTC from long-term holders (LTHs) to short-term holders (STHs). This record movement is depicted in the Long-Term Holder Net Position Change chart, showing a notable red bar that highlights a substantial negative difference, revealing a considerable exit from long-term wallets.

Bitcoin Long-Term Holder Net Position Change | Source: CryptoQuant

Key Insights

Bitcoin is experiencing significant selling pressure below the $90,000 level.
Analysts suggest we may be entering a new bear market post a peak of $126,000.
A historic 63,000 BTC has moved from long-term holders to short-term buyers.
Long-term holders are significantly distributing, while short-term holders are actively buying.
The current market structure is a common pattern observed in late-stage bull markets.
Market dynamics signal possible risks if demand does not keep pace with distribution.
Bitcoin is testing the 100-week moving average as a key support level.

Divergence of Long-Term Holders and Short-Term Buyers

CryptoOnchain indicates that a notable divergence is emerging between Long-Term Holders (LTHs) and Short-Term Holders (STHs). Historically viewed as the market's "strong hands," LTHs are now distributing their Bitcoin significantly, selling quantities they have held for months or even years. In stark contrast, STHs are actively buying up this supply, often at higher prices amid rising volatility.

This distribution behavior isn't inherently negative. Such trends are often seen in the final stages of bull markets, where established investors look to secure profits while newer participants bring in fresh capital. This phenomenon is part of a natural progression of supply shifting from seasoned holders to newer investors, a cycle observed in past market movements.

However, the scale of this distribution is noteworthy. If the purchasing demand from STHs does not match the offloaded coins from LTHs, the market may encounter a more significant correction or enter a prolonged consolidation period. Such supply pressures could impact prices, particularly in a landscape filled with uncertainty and fragile market sentiment.

Critical Weekly Chart and Support Levels

Bitcoin is attempting to stabilize around the $87,000 level following a recent intense sell-off that saw prices plunge to $85,946. The weekly chart indicates that Bitcoin has touched the 100-week moving average (represented by a green line), a historically significant support level during corrections in bull markets. While this line has offered support in earlier cycles, the current rebound appears weak and uncertain, reflecting the prevailing market fears.

BTC holding key support | Source: BTCUSDT chart on TradingView

Momentum has shifted toward a bearish outlook. The breakdown from the $110K to $100K range accelerated selling actions, indicating a loss of the market structure on a weekly basis. Recent trading candles illustrate high-volume distribution, underscoring sellers' dominance whenever Bitcoin attempted to regain higher levels. Additionally, the slight downward turn of the 50-week moving average further signals a weakening trend.

Nonetheless, the response at the 100-week moving average remains crucial. Previous macro corrections saw bulls defending this area fiercely, and maintaining levels above $83K-$86K will keep the long-term bullish structure intact. A weekly closing below this zone, however, could lead to a deeper decline towards the 200-week moving average, located around $56K-$60K.

Featured image from ChatGPT, chart from TradingView.com