Bitcoin’s continuous price fluctuations have caught the attention of analysts, as it remains below the $100,000 mark. Despite hitting a record high of over $108,000 just last week, the cryptocurrency has been unable to sustain its upward progression.
This price performance has prompted a closer inspection of Bitcoin’s on-chain data to understand the dynamics of recent selling pressures and investor behavior. A significant tool in this analysis has been the Spent Output Age Bands (SOAB) indicator, which offers valuable insights into Bitcoin holders’ actions based on the duration of their holdings.
Who Cashed Out Their Bitcoin Gains?
Yonsei Dent, a CryptoQuant analyst, reports that Bitcoin investors who made their purchases six to twelve months ago have been the most active in selling during the recent price rally.
This cohort entered the market amid the enthusiasm surrounding the launch of spot Bitcoin exchange-traded funds (ETFs) earlier in the year. Despite the selling activity weighing down Bitcoin’s price, the cryptocurrency has found some stability between $90,000 and $100,000.
Long-term holders, those who have kept their Bitcoin for more than a year, have shown little selling activity. Historically, these veteran investors tend to hold out for higher price levels before opting for significant profit-taking.
Dent also drew attention to the Binary Coin Days Destroyed (CDD) metric, which has shown a reduction in older Bitcoin being moved in December compared to November. Less movement from long-term holders during price corrections often suggests market resilience and potential for upward momentum.
The analyst commented:
"The ‘Binary CDD’ indicator at the bottom of the chart shows a decline in the selling of older Bitcoin in December compared to November. This suggests that many long-term holders may anticipate even higher prices before selling."
Binance Reserves Signal Market Confidence
On the topic of rising prices, another essential metric hinting at a possible significant movement for Bitcoin involves Binance’s Bitcoin reserves, which have consistently decreased since August.
Darkfost, another CryptoQuant analyst, noted that Binance’s reserves recently hit their lowest point since January. Historically, a similar decline earlier in the year was followed by a 90% increase in Bitcoin’s price.
A decrease in exchange reserves typically indicates that investors are transferring their Bitcoin from centralized exchanges to private wallets. This trend suggests less selling pressure and a shift towards long-term holding strategies. Historically, falling reserves on exchanges have correlated with periods of strong market optimism and subsequent price increases.
Currently, as BTC trades at $95,567 and is down by 2.7% over the past day, these factors—confidence among long-term holders, reduced activity from older wallets, and declining exchange reserves—paint an optimistic picture for Bitcoin’s short-term path.
Nevertheless, it is important to note that sustained buying activity will be needed to overcome psychological resistance levels and sustain upward momentum.
Featured image created with DALL-E, Chart from TradingView.
