Long-term Bitcoin holders – those holding BTC for over 1-2 years – tend to sell portions of their holdings during bullish price phases when bitcoin’s price is rising. This selling behavior was observed from early 2024 through April.
However, holders with Bitcoin UTXOs (unspent transaction outputs) older than 3 years continued to accumulate more BTC supply, indicating strong long-term bullish sentiment among this cohort.
Diverging Behavior Among Long-Term Bitcoin Holders
According to the latest findings by CryptoQuant, over 50% of BTC’s total supply has remained inactive on the blockchain for over a year, suggesting conviction among long-term holders about bitcoin’s future value proposition despite price fluctuations.
As the price of the world’s largest cryptocurrency recovered from the recent correction to $56,000, the 1-year and 2-year holder cohorts transitioned from a distribution (selling) phase to a holding one, signaling renewed confidence in bitcoin’s upside potential.
The asset’s technical outlook is at a critical juncture, testing significant support levels. The behavior of long-term holders, combined with key on-chain metrics, suggests an underlying bullish sentiment, as per CryptoQuant.
A similar observation was made by Glassnode, which noted that a certain group of long-term Bitcoin holders, who had been selling portions of their holdings for multiple months since December 2023, have started re-accumulating or buying BTC again.
The market intelligence firm’s report indicates that after bitcoin’s price approached its all-time high, long-term holders have transitioned from a selling phase to an accumulation phase over the past week. This pattern suggests that significant volatility may be needed to trigger another wave of sell-offs from these long-term holders.
However, CryptoQuant noted that a break below the daily Ichimoku cloud could shift market sentiment bearish, potentially leading to a retracement towards $64,000.
When Next Peak?
During every bull market cycle, LTH typically starts selling or distributing their Bitcoin holdings as the price moves to new highs, which was observed during the current cycle as well, according to another analysis by IntoTheBlock.
Generally, the LTH balance reaches its lowest point shortly after the market peak. In the 2017 bull run, it took around 270 days after LTHs started selling for their balance to hit its lowest, which coincided with the market cycle peak.
In the last bull market, there were two peaks. The first peak occurred 210 days after LTHs started selling, while the second peak took place 410 days after the initial decrease in their balances. In the current cycle, LTHs started selling again, with late December 2023 identified as the starting point for this distribution phase.
Based on the timeframes observed in previous cycles, IntoTheBlock estimated that the next market peak could occur within the next 140 to 260 days after LTHs started selling, which translates to a potential peak window between October 2024 and March 2025.
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