As Bitcoin (BTC) prices have recently hovered around the $100,000 range, long-term holders have been unusually active during this period. Some analysts believe this may signal an impending bearish market, and when buyer demand weakens, it could catch investors off guard.
Long-term holders are selling large amounts of Bitcoin
Since November 8, long-term holders who have held Bitcoin for at least 155 days have sold 827,783 Bitcoins, worth approximately $82.6 billion at the current price of about $99,200 each.
CryptoQuant analyst Maartuun noted in a post on X on December 8 that while MicroStrategy purchased approximately 149,800 Bitcoins during this period, another 84,200 Bitcoins flowed into Bitcoin spot ETFs, these purchases accounted for only 30% of the sell-off volume by long-term holders. Maartuun warned:
This is a game of musical chairs: enjoy the journey, but be ready for the moment the music stops.
Retail demand becomes a supporting force
Despite the significant sell-off pressure from long-term holders, Bitcoin has maintained a strong price performance, partly due to the rebound in retail demand. According to CryptoQuant data, retail demand has reached an annual high.
At the same time, retail investors are actively participating in Bitcoin futures trading. Data from CoinGlass shows that the total open interest (OI) for Bitcoin currently reaches $61.2 billion, reflecting the level of market trading activity.
Long-term holders enjoy considerable unrealized profits
Maartuun further pointed out that the sell-off risk ratio and net buyer trading volume may indicate that the market is close to a "top."
According to Bitbo data, the realized price for long-term holders (i.e., the average price at which long-term holders purchased Bitcoin) is $24,481, meaning that the average unrealized profit for these holders has reached approximately 400%.
Deteriorating liquidity environment
On the other hand, Jamie Coutts, the chief cryptocurrency analyst at Real Vision, stated in a report on December 6 that, according to its Bitcoin MSI macro model, deteriorating liquidity conditions could bring pressure.
In the context of reduced liquidity, Bitcoin has reached a new high, but if this situation worsens, this wave of fervent rise may not be sustainable.
Overall, Bitcoin prices are close to historical highs, but massive sell-offs by long-term holders and liquidity pressures may pose challenges for the market. Investors should remain cautious and watch for potential signs of market turning.
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