Long-term holders are cashing out significantly, yet no panic selling is observed.
Blockchain data analysis firm Glassnode's latest report (The Week On-chain Newsletter: Resilience and Synchronicity) points out that Bitcoin has surged over 150% since 2024, with prices once soaring above 100,000 USD. However, it has recently been observed that long-term holders are significantly releasing their holdings, creating a record of over 2.1 billion USD in realized profits in a single day; meanwhile, new investors are actively entering the market to take over, preventing the overall market from showing significant panic selling. Whether this high level of profit-taking indicates that the bull market has prematurely ended remains to be further observed.
The report shows that the current bullish cycle of Bitcoin is remarkably similar to historical bull market trends from 2015-2018 and 2018-2021, but its market capitalization and capital flow far exceed previous levels. Surprisingly, compared to prior bull markets, this year's volatility has been relatively smaller, with the maximum correction being only about 32%, indicating strong demand-side absorption. In particular, the group holding coins for 6 to 12 months has contributed the vast majority of selling pressure, while holders of coins for 3 years or longer have remained almost inactive, suggesting they may be waiting for higher prices before selling.
Source: Glassnode. The current bullish cycle of Bitcoin is remarkably similar to historical bull market trends from 2015-2018 and 2018-2021.
New users are pouring in, and the chip structure is shifting.
At the same time, Glassnode has observed a significant rise in the proportion of new users in the overall network wealth, reflecting that more and more people are entering the market at this stage to take over the chips thrown out by long-term holders. This is also a common sign of rotation in a bull market: seasoned investors are cashing in profits while new investors are continuously entering the market to chase the rise. However, based on historical experience, true madness and saturation often occur when almost everyone in the market is in a state of massive profits. Glassnode indicates through metrics like the 'AVIV Ratio' that the market has not yet reached that excessive euphoria threshold, meaning that investors' unrealized profits still have room to grow.
Source: Glassnode. The AVIV Ratio indicator shows that the market has not yet reached that excessive euphoria threshold, meaning that investors' unrealized profits still have room to grow.
It is worth noting that although most short-term holders' coins once fell into unrealized losses, the unrealized losses they endured did not lead to significant market tremors. The two deeper corrections that occurred in August and September of this year did not trigger significant selling waves or panic, allowing Bitcoin to maintain a relatively stable upward trajectory.
Future market trends are uncertain, but the report is not lacking in optimism.
Overall, the Glassnode report believes that while Bitcoin is absorbing a significant amount of profit-selling pressure, it still shows overall demand is healthy, with new funds constantly filling in. The reason long-term investors are selling off in large quantities is often a common phenomenon of 'capital rotation' in the later stages of a bull market, but current data indicates that the market has not yet entered the 'overall frenzy' phase. Since most seasoned holders have not fully realized their profits, there may still be room for an increase, and a sharp decline after the peak of the bull market has not yet been observed.
However, as Bitcoin has surged repeatedly, investors should remain vigilant about the possibility of a sharp correction. If long-term holders continue to sell and the demand side is unable to absorb the selling, the bull market could come to an abrupt halt. Whether this round of increases is 'to be continued' or 'the peak has already occurred' is not conclusively determined by the signals given by Glassnode. However, it is certain that between the interaction of new funds and seasoned long-term holders, there is still rich potential in the Bitcoin market; investors may need to continue observing changes in the overall economy and market sentiment and carefully assess risks.
'Glassnode Report: Bitcoin Long-Term Holders Cash Out 2.1 Billion USD! Has the Bull Market Ended Before It Began?' This article was first published in 'Crypto City.'
