Bitcoin Long-Term Holders Shift to Distribution Phase

Recent on-chain analysis reveals a notable shift in behavior among Bitcoin’s long-term holders (LTHs), a class of investors typically known for their conviction and holding patterns. According to prominent on-chain analyst Burak Kesmeci, who shared his findings on social media platform X, the Long-Term Holder Net Position Change metric has shown increasing momentum toward the sell side. This metric specifically tracks the net buying or selling behavior of Bitcoin’s long-term investors over a 30-day period, providing crucial insight into market structure and investor sentiment.

The data indicates that approximately 400,000 BTC has been sold off by long-term holders in the past month, marking a clear transition from accumulation to distribution. When this metric registers negative readings, it signals that LTHs are in a distribution phase, meaning more participants within this investor class are selling Bitcoin than buying. The persistence of this selling behavior stands as a particular concern for market observers, as long-term holders have historically been considered the ‘smart money’ in cryptocurrency markets.

The continued distribution by long-term holders creates significant implications for Bitcoin’s price trajectory. Kesmeci’s analysis suggests that if Bitcoin’s long-term investors were to desist from selling their holdings, the cryptocurrency could potentially put in a local price bottom. Such a development would typically indicate renewed interest and strategic positioning for the next market cycle. However, the current reality shows no easing in LTH sales, creating sustained bearish pressure that could push Bitcoin further downward.

Another perspective comes from crypto analyst Darkfost, who offered a more nuanced interpretation of the situation. In his X post, Darkfost highlighted that the 2.2% reduction in Bitcoin LTH supply during October represents a relatively modest decline when compared to historical patterns. The analyst pointed to March 2024, when Bitcoin’s LTH supply dropped by approximately 5.05%, and December, which saw an even higher decline of about 5.2%. This comparative analysis suggests the current distribution might represent early profit-taking rather than a fundamental loss of confidence.

Darkfost implied that the market could soon see a rebound in Bitcoin price if this interpretation holds true. The current distribution phase might therefore represent a temporary adjustment rather than a sustained trend. However, both analysts agree that the long-term holder net position trend requires careful monitoring, as a move back toward neutral readings could signal the start of a new accumulation phase and subsequent price reversal to the upside.

The current market situation presents a critical juncture for Bitcoin investors and analysts alike. The distribution behavior among long-term holders creates a complex dynamic where traditional market signals may need reinterpretation. The approximately 400,000 BTC sold over the past 30 days represents substantial selling pressure that must be absorbed by other market participants. This comes at a time when Bitcoin trades at approximately $110,750, showing minimal movement over the past 24 hours.

The divergence in analyst interpretations—between Kesmeci’s concern about continued distribution momentum and Darkfost’s view of modest supply reduction—highlights the uncertainty in current market conditions. What remains clear is that long-term holder behavior serves as a crucial indicator for market direction. A continuation of the distribution trend could maintain downward pressure on Bitcoin’s price, while a reversal toward accumulation would likely signal renewed bullish momentum.

Market participants should closely watch the Long-Term Holder Net Position Change metric for signs of shifting sentiment. The metric’s movement toward neutral or positive territory would provide the clearest signal that distribution pressure is easing and accumulation may be resuming. Until such signals emerge, the market faces the challenge of navigating between competing interpretations of long-term holder behavior and its implications for Bitcoin’s price trajectory.