Bitcoin rapid ascent towards the $100,000 mark is being met with an increasing wave of selling from long-term holders, a development that has some analysts concerned about a potential market peak.
As the cryptocurrency nears its historic price threshold, a shift in market dynamics could soon catch traders offside, especially if the current buy-side demand begins to fade.
Long-term Holders Cashing Out
According to data from CryptoQuant contributor Maartuun, long-term holders — defined as wallets that have held Bitcoin for over 155 days — have sold an alarming 827,783 BTC since November 8. At Bitcoin’s current price of approximately $99,200, this amounts to roughly $82.6 billion in offloads.
This large-scale selling has sparked concerns that the market may be reaching a top, especially given that these holders are sitting on significant unrealized profits, with an average gain of around 400%.
Retail Demand and ETF Inflows Keep Bitcoin Strong
While prominent buyers like MicroStrategy and Bitcoin ETFs have added to their holdings — with MicroStrategy purchasing 149,800 BTC and ETFs seeing 84,193 BTC inflows over the same period — Maartuun points out that these inflows represent only a fraction (roughly 30%) of the sell-offs by long-term holders.
“The overall market is much larger than just them,” Maartuun said, adding that retail traders, particularly those involved in Bitcoin futures, are also playing a significant role in the market’s current dynamics. Bitcoin’s Open Interest (OI), which tracks the total number of unsettled derivative contracts, stood at a hefty $61.2 billion as of early December.
Profit-Taking and Liquidity Concerns
The growing concern is the impact of long-term holders exiting the market. Many are sitting on massive profits, with Bitcoin’s Long-Term Holder realized price — the average price paid by long-term holders — sitting at $24,481. As Bitcoin approaches $100,000, this sell-side pressure could signal a top, particularly if retail demand begins to taper off.
Analysts are already sounding the alarm. On December 6, Real Vision’s chief crypto analyst, Jamie Coutts, pointed to worsening liquidity conditions, which could soon dampen the rally. His Bitcoin MSI macro model suggests that while Bitcoin is hitting all-time highs (ATHs), the market is operating in a deteriorating liquidity environment. If this trend worsens, the current euphoria could soon give way to a downturn, with the rally potentially running out of steam sooner than expected.
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