Long-Term Bitcoin Holders Are Cashing Out—Should You Worry

Bitcoin Holders Are Selling—And That’s a Bullish Signal
Why Bitcoin’s Sell-Off Might Be a Setup for the Next Big Rally

In the stock market, when long-term investors start selling their holdings, it’s often seen as a warning sign of an impending downturn. However, in the world of cryptocurrency, the opposite is true—historically, large sell-offs by long-term Bitcoin holders have signaled strong rallies.

According to analysts, Bitcoin holders who have held their coins for over 155 days have recently begun offloading their holdings. Markus Thielen, founder of 10x Research, points out that similar sell-offs in early and late 2024 led to major Bitcoin price surges. “As long as long-term holders continue reducing their balances, Bitcoin remains at risk of a short squeeze to the upside,” he explained in a report shared with CoinDesk.

The total Bitcoin supply held by these long-term investors has dropped to around 13 million BTC. Data from analytics firm Glassnode shows that over 1 million BTC have changed hands recently as Bitcoin surged past $100,000. Short-term traders have been absorbing the supply at prices above $90,000, fueling demand.

However, this selling trend is now slowing down, suggesting that long-term holders are taking a more cautious approach. The rate of Bitcoin moving from long-term to short-term holders has eased compared to earlier in the month.

At the same time, Bitcoin reserves on centralized exchanges have fallen from over 3 million BTC to 2.7 million BTC in the past six months. Typically, when Bitcoin leaves exchanges, it’s seen as a bullish sign since it reduces the available supply for quick sales. However, the market dynamics have shifted since U.S. spot Bitcoin ETFs launched a year ago.

Glassnode notes that much of the BTC leaving exchanges is actually moving into ETF custody accounts managed by firms like Coinbase. Unlike traditional withdrawals, which reduce selling pressure, ETFs are highly liquid, meaning these coins can still be bought and sold easily. Adjusting for this shift, Glassnode estimates that the real exchange balance remains above 3 million BTC.

Despite these changes, history suggests that Bitcoin’s rally could continue as demand stays strong and long-term holders keep selling at higher price levels.

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