Market Analysis
Bitcoin HODLers seem to have completed their profit-taking activities from long-dormant coins following a robust rally earlier in the year that pushed them significantly into profitability. According to a well-known crypto market analyst, TXMCtrades, the market has absorbed the bulk of the supply from Long-Term Holders expected to participate in this particular surge.
“As in every cycle, old supply came to life at the highs to pay itself for years of enduring risk,” explained TXMCtrades in a recent post.
The total coin supply held by long-term holders, referring to coins untouched for 155 days or more, steadily increased between July 2022 and January 2024. However, this trend shifted with the arrival of U.S. Bitcoin spot ETFs, which injected significant capital into the market, subsequently boosting the asset’s value and prompting HODLers to capitalize on their profits.
Future Outlook
Historical data illustrates that the supply held by long-term holders has typically risen over Bitcoin’s lifespan. The pattern deviates during rapid price surges to new all-time highs for BTC, observed in periods such as December 2013, late 2017, and early 2021. Analyst TXMC anticipates that long-term holders will not significantly resume buying/selling activity until the occurrence of the “next cyclical breakout.”
“Bear case is we’ve topped, and it looks about right,” stated Glassnode analyst James Check, expressing surprise that Bitcoin has not retraced at least 20% from its March peaks despite the HODLer sales conducted thus far. He further commented, “Bull case is, we absorbed a full bull, and we’re not done.”
Experts like Peter Schiff caution that if Bitcoin falls below $58,000 again, signifying the average cost basis for short-term holders, it could mark the beginning of an official bear market, leading many to rapidly exit their positions if faced with losses.
