Long-term holders, known for stabilizing Bitcoin’s price by retaining their assets through market fluctuations, indicate a sentiment shift through their decision to liquidate a substantial portion of their holdings.
Long-term Bitcoin (BTC) holders sold approximately $10 billion worth of BTC in May 2024, according to data from blockchain analytics firm IntoTheBlock. This massive sell-off, amounting to around 160,000 BTC, marks a significant change in the behavior of long-term investors.
Long-term BTC holders have been reducing their holdings throughout 2024.
May saw a significant drop with 160k BTC (~$10B) sold. The selling slowed down somewhat in June, with 40k $BTC Leaving long-term holders' wallets pic.twitter.com/POtniNrU4p
— IntoTheBlock (@intotheblock) June 28, 2024
Historically, long-term holders tend to retain their assets through market fluctuations, contributing to Bitcoin’s overall price stability. The decision to liquidate such a substantial portion of their holdings indicates a shift in sentiment. Although June saw a slower sell-off, with long-term holders offloading an additional 40,000 BTC, the trend of liquidation among these investors continues.
This sell-off has contributed to a bearish sentiment in the market. Over the past 30 days, Bitcoin’s price has dropped by 10.03%, reflecting the market’s reaction to the increased selling pressure. Currently, Bitcoin is trading at $61,343, a noticeable decline from its previous levels.
Factors Influencing BTC Liquidation
Several factors might be influencing long-term holders to sell their BTC. Given Bitcoin’s substantial appreciation over the past few years, many of these investors, who acquired BTC at significantly lower prices, might be capitalizing on their gains.
Substantial outflows from spot Bitcoin exchange-traded funds (ETFs) in the United States, totaling more than $1 billion over the last ten trading days, might also be influencing this trend. Additionally, there are concerns that Mt. Gox, the infamous crypto exchange that collapsed years ago, might be preparing to sell $8.5 billion worth of Bitcoin to its creditors, which could significantly impact market sentiment. Germany has also started selling some of its Bitcoin reserves, adding to the negative outlook.
Bitcoin miners have been selling more Bitcoin than usual amid a tumbling network hashrate, which may have also weakened market sentiment. Broader economic factors, including changes in interest rates, inflation worries, and geopolitical events, can also influence investor actions. Long-term holders may be adjusting their portfolios in response to these broader economic changes.
The sustained sell-off by long-term holders raises questions about the future trajectory of Bitcoin’s price.
