Long-Term Selling Wave and Different Cycle in Bitcoin

The recent fluctuations in the price of Bitcoin (BTC) have led to a renewed focus on the behaviors of long-term investors. With a notable divergence in the current bullish cycle, the supply of Bitcoin held by long-term investors has declined to its lowest level in the past eight months.

According to Glassnode data, the amount of Bitcoin held by long-term investors has dropped to 14,342,207 BTC. This level was last seen in May, during which time the price of Bitcoin experienced a decline of approximately 40% from its all-time high in October. Glassnode defines long-term investors as wallets that have held Bitcoin for at least 155 days. Therefore, investors who purchased in mid-July and have not sold their assets since are included in this category.

Current data indicates that three separate long-term selling waves have occurred in the cycle that began in 2023. The first wave of sales happened between the end of 2023 and the beginning of 2024 with the launch of spot Bitcoin ETFs in the U.S. During this period, long-term investors felt the need to sell, seizing the opportunity as the Bitcoin price rose from approximately $25,000 to a peak of $73,000. The second wave came with the price nearing $100,000 and the increased optimism following Donald Trump’s election victory.

The market is currently experiencing the third wave of sales. Although Bitcoin has remained above $100,000 for much of the year, it appears that long-term investors are continuing their gradual selling. According to Alec, co-founder of Checkonchain, this cycle clearly differentiates itself from the bullish markets of 2013, 2017, and 2021. In previous periods, long-term investor supply typically shaped around a single peak followed by a recovery process, whereas this time the market is demonstrating the ability to absorb successive waves of sales without forming a definite peak.

Experts suggest that these sales by long-term investors continue to be one of the main reasons for the significant correction observed in Bitcoin since October. It is crucial for investors to carefully monitor these developments and the market's trajectory as an important strategy.