Recent analysis reveals that Bitcoin’s long-term holders are offloading a notable amount of their holdings, sparking curiosity about whether this level of sell-off is enough to signal a price top.
Increased Selling Among Bitcoin Long-Term Investors
In a fresh post on X, finance analyst Ali Martinez delves into the historical patterns of Bitcoin holdings by long-term investors, and their connection to market peaks. Long-term holders (LTHs) are those Bitcoin investors who have kept their coins for over 155 days.
This group of LTHs is one half of the Bitcoin holding spectrum, with their counterparts being the short-term holders (STHs).
STHs have traditionally been viewed as the more volatile segment of the market, whereas LTHs are the steadfast "HODLers" who typically remain unfazed by price swings. Therefore, while short-term holder sales often go unnoticed, sell-offs by long-term holders can be significant, given their rarity. One way to monitor these steadfast holders is by examining their Net Position Change.
The Net Position Change is a blockchain metric that captures the total Bitcoin flow into or out of the long-term holder group. Below is a chart shared by Martinez that illustrates this metric’s activity throughout Bitcoin’s history.
The chart highlights a recent, steep drop in the Bitcoin LTH Net Position Change, signifying a net outflow from this cohort.
This isn’t the first time this year we’ve seen such a trend. A similar situation unfolded in the first quarter, as marked by Martinez on the chart, with several past instances also noted.
Historically, these significant sell-offs by LTHs have often aligned with impending peaks in the crypto market. As Martinez points out, "Interestingly, in 2017 and 2021, their biggest sell-offs occurred right before the final leg up."
If the current bullish trend mirrors these past cycles, we might just be witnessing the beginning of the final surge that precedes Bitcoin’s cyclical peak.
Furthermore, the current Net Position Change is not as markedly negative as during the peak selling phases of the 2017 and 2021 bull markets, suggesting that the top may not be imminent. However, time will tell if these historical patterns will repeat.
Bitcoin Price Update
As for Bitcoin’s current market position, it has entered uncharted territory by setting a new all-time high, surpassing the $107,000 mark.
