After reaching an all-time high (ATH) of $99,800, Bitcoin [BTC] has seen a decline, hitting a low of $92,584 recently. As of the latest data available, Bitcoin is being traded at $94,972, reflecting a 3.47% decrease in value over the last 24 hours.
Prior to this drop, Bitcoin had been steadily climbing, showing a 3.44% increase on the weekly charts and a significant 41.61% surge on the monthly charts.
So, the sudden downturn following a period of historic growth has led to speculation regarding the underlying causes. According to insights from Glassnode, Long-Term Holders(LTHs) could be playing a significant role.
Identity of Bitcoin Sellers?
Analysts at Glassnode suggest that Long-Term Holders of Bitcoin may be behind the recent sell-off. Reports indicate that these holders have offloaded 366k BTC tokens, marking the highest level of selling since April. This selling pressure has likely contributed to the market retracement observed.
It appears that the recent surge in profit margins prompted Long-Term Holders to cash in on their gains.
Specifically, cohorts holding between 6 million to 12 million BTC have been particularly active in this regard, with daily profit-taking exceeding 25.6k BTC tokens.
Notably, this group had acquired BTC at a cost basis 71% lower than the average price of $57.9k. As Bitcoin reached a peak of $99k, these Long-Term Holders realized substantial profits from the rally.
Given these dynamics, it seems that the recent correction in the market is driven by intensified selling activities among Long-Term Holders.
Effects on Bitcoin’s Price Trends?
According to an analysis by CryptoCrypto, despite the decline in Bitcoin’s daily charts, the overall trend remains bullish. The recent pullback has provided opportunities for whales and retail traders to accumulate more BTC.
For instance, Bitcoin’s Whale Exchange Ratio has dropped from 0.4 to 0.32 over the past week, demonstrating ongoing accumulation by whales even as Long-Term Holders sell off their holdings.
Furthermore, there has been a noticeable increase in Bitcoin’s Fund flow ratio, rising from 0.08 to 0.15. This uptick indicates growing buying pressure, with more funds flowing into Bitcoin than out of it.
Moreover, the rising Stock-to-Flow(SFR) reversion further underscores the bullish sentiment in the market. An increase in SFR reversion typically signals a growing confidence in Bitcoin’s value, often attributed to heightened demand and adoption.
In essence, while some Long-Term Holders have been capitalizing on profits lately, Bitcoin’s overall trajectory remains positive. Whales continue to accumulate, fund inflows are robust, and the market sentiment appears optimistic.
Given these conditions, Bitcoin could potentially retest the $99,000 resistance level, a point where it has faced resistance on multiple occasions. Beyond this level, there seems to be limited resistance, potentially paving the way for another all-time high for the cryptocurrency.