Recent on-chain data shows that a relevant category of Bitcoin investors known as long-term holders have continued to exit their positions in the market.
LTHs are actively shifting to distribution
In a November 1 post on social media platform X, popular on-chain analyst Burak Kesemici said subscriber Insight into the structural bias prevalent among long-term holders of Bitcoin. Kesmeci’s analysis is based on the long-term net holder position change measure, which tracks the net buying or selling behavior of long-term Bitcoin investors over a 30-day period.
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A positive reading is usually interpreted as a sign that LTHs are in a net accumulation phase, as the number of market participants within the investor class who are buying Bitcoin is greater than those who are selling it. On the other hand, when the measure of net long-term carrier position change is negative, it means that LTHs are in the distribution phase.
Kesmeci explained in his post that there has been an increasing amount of momentum towards the sell side of the scale. In the highlighted chart, it appears that around 400,000 Bitcoins have been sold in the past 30 days. Interestingly, LTHs do not appear to be diluting their sales – behavior that is also a concern.
If long-term Bitcoin investors stop selling their holdings, Bitcoin could set a local price bottom, as this usually indicates renewed interest and a “smart money” position for the next cycle. However, if this distribution momentum continues to grow, the flagship cryptocurrency may continue to trend downward, as its long-term holders continue to pump out more bearish pressure.
LTH 2.2% supply decline is relatively modest – Analyst
In another X post, cryptocurrency analyst Darkfost Highlight On the implications of Bitcoin LTH’s shifting behavior. According to the analyst, the “modest decline” of 2.2% in Bitcoin LTH supply in October is not much to worry about, especially when compared to levels seen in 2024.
As of March 2024, the LTH supply of Bitcoin has declined by approximately 5.05%. In December, there was a larger decline of about 5.2%. Darkvost noted that the current distribution the market is witnessing could be a result of early profit taking, as the market could soon see a recovery in the price of Bitcoin.
However, the net trend of long-term holders’ position is one to watch, as a return towards neutral readings can signal the beginning of the accumulation phase and a subsequent price reversal towards the upside.
As of this writing, BTC is worth around $110,750, with no significant movement in the past 24 hours.
The post Bitcoin Long-Term Holders Show Signs Of Selling — Is A Reversal Imminent? first appeared on Investorempires.com.
