Imagine that the price of Bitcoin is soaring like a rocket, approaching the eye-catching $100,000 mark. However, at this moment of great attention, who will quietly sell BTC behind the scenes, adding a touch of mystery and suspense to this feast?
As the price of Bitcoin continues to rise, long-term holders (LTH) have finally started to act. They have distributed more than 507,000 BTC, which is less than the 934,000 BTC during the March rally, but it is enough to make waves in the market. These long-term holders have locked in considerable profits, and the daily profits have hit a new high of $2.02 billion!
Where do these sold BTC come from?
After carefully evaluating the composition of physical spending, most of the selling pressure seems to come from BTC held between 6 months and 1 year. This makes people wonder why these "new riches" choose to sell at this time? Is their view on the future market changed, or is it just to lock in profits?
What is even more striking is that the selling activities of long-term holders seem to be getting more and more intensive. After a series of record highs, the price of Bitcoin has been getting closer and closer to the much-anticipated $100,000. Long-term holders took advantage of this influx of liquidity and increased demand to start selling their BTC on a large scale.
However, how will the market react? Will these sell-offs cause the price of Bitcoin to pull back? Or will new buyers rush in and continue to push the price higher? These questions are full of uncertainty, but it is precisely these uncertainties that make the market full of charm.
In addition, we can also look at this phenomenon from the perspective of profit locking. Long-term holders play a key role in the price discovery process and are the main source of liquidity returned to previously dormant supply. As the bull market progresses, these long-term holders have become more cautious in taking profits. They realize profits of up to $2.02 billion per day, which requires a strong demand side to fully absorb this excess supply.
So, can the supply and demand relationship in the market remain balanced?
Will these sold BTC be quickly absorbed by new buyers? These are questions we need to pay close attention to.
When assessing the balance between long-term holders’ profit and loss, we can see an interesting phenomenon: the profit and loss ratio accelerated rapidly in November. This could be due to losses caused by insufficient LTH supply, but it could also be that the market is searching for a new equilibrium point.
Finally, let's focus on the Sell Side Risk Ratio. This metric assesses the total amount of realized profits and losses locked in by investors relative to the size of the asset. Currently, the Sell Side Risk Ratio is approaching the high range, which means that significant profit-taking is occurring in the current range. However, even so, the current reading is still significantly lower than the final values reached in the previous cycle. This suggests that previous bull markets had enough demand to absorb the supply even under similar relative selling pressure.
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The above content is for information sharing only and does not constitute any investment advice! Investment is risky, so be cautious when entering the market!
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