Long-Term Bitcoin Holders Halt Selling Activity

Long-Term Bitcoin Holders Halt Selling Activity

Recent observations by Matthew Sigel from VanEck indicate that long-term Bitcoin holders have shifted to being net buyers rather than sellers. This suggests that the significant selling activity seen since 2019 is likely behind us. Current market trends show Bitcoin hitting an intraday peak of $89,201, reflecting notable changes among these holders.

Key Takeaways

Long-term Bitcoin holders are currently accumulating rather than selling their assets.
An indicator shows that their major selling period is likely over, marking a shift in market dynamics.
Bitcoin is experiencing a slight decline of 5.19% year-to-date, with historic patterns suggesting a potential for recovery.
Analysts believe Bitcoin needs to regain the $100,000 mark to shift back into a bullish market.

Long-Term Holding Trends

According to Matthew Sigel from VanEck, Bitcoin's long-term holders (LTHs) have transitioned into net accumulators. This development suggests that their most significant selling activity since 2019 has likely come to a close.

Earlier today, Bitcoin surged to an intraday high of $89,201, as reported by CoinGecko data.

On-Chain Analysis of Long-Term Holders

The chart provided by Sigel illustrates the 30-day change in supply held by long-term holders. In on-chain analysis, an LTH is typically defined as any entity that has maintained their coins for 155 days or longer.

In this analysis:

When the bars are blue and above the zero line, it indicates that LTHs are purchasing and securing their coins. This commonly occurs during bear markets or times of price decline.
Conversely, when the bars are red and below the zero line, it suggests that LTHs are liquidating their coins into the market, which typically happens during bullish market conditions when prices are elevated.

LTHs generally behave differently from retail investors, opting to buy when there is widespread fear and sell when there is significant greed in the market.

Market Implications of Selling Trends

The graphical representation shows that the period of significant profit-taking by LTHs appears to be coming to an end. They have completed selling the amounts they intended to liquidate at current price levels.

When LTHs cease selling, a major source of selling pressure is lifted from the market. If demand stays steady or increases, this creates an opportunity for a considerable price rally since there are fewer "whale" sellers holding back prices.

Historically, a return to the zero line after a phase of heavy selling often signals a consolidation period or a shift back toward accumulation.

Year-to-Date Performance of Bitcoin

As of now, Bitcoin shows a decline of 5.19% year-to-date. Historical data indicates that after any year of negative returns for the leading cryptocurrency, the following year has typically turned out positive, boasting an average return of 124.5%.

However, as highlighted by Mike Novogratz, for Bitcoin to fully shift back into bullish territory, it first must reclaim the $100,000 level.