Why Bitcoin’s Long-Term Holders Are Selling Now

As Bitcoin trades around $102,609 against a backdrop of visible institutional buying, market participants are asking a fundamental question: who is supplying the coins to meet this demand? Chris Kuiper, CFA and vice president of research at Fidelity Digital Assets, identifies this as the dominant inquiry he’s been fielding. ‘Who is selling?’ is the number one question I’ve been getting regarding bitcoin’s continued price pressure against a backdrop of visible buying,’ Kuiper wrote on social media platform X on November 12. ‘I’m not unique in suggesting it’s the long-term holders (or HODLers).’

The apparent disconnect between institutional inflows and price performance has left traders searching for explanations. While spot Bitcoin ETPs and corporate buyers continue to accumulate, their purchasing power has been systematically absorbed by selling pressure that prevents decisive upside momentum. Kuiper’s analysis points to a specific cohort of market participants whose behavior differs significantly from previous cycles, creating a supply dynamic that has kept prices range-bound despite ostensibly bullish conditions.

Kuiper points to Glassnode’s ‘Percent of Supply Last Active 1+ Years Ago’ metric as crucial evidence supporting his thesis. This on-chain gauge tracks the percentage of outstanding Bitcoin that hasn’t moved for at least one year, typically rising during bear markets as coins age in place and investors sit on unrealized losses, then declining sharply when bull markets enable those same investors to exit into strength. ‘As you can see in the chart below, this line goes up during bear markets … and then usually a dramatic decline as these longer-term holders sell into the strength of a bull market,’ Kuiper explained.

What distinguishes the current cycle is the nature of this decline. When Bitcoin hit new highs earlier this year, the long-term-holder line ‘didn’t plunge’ according to Kuiper. Instead, the market has experienced ‘a consistent slow bleed as the market has slowly moved sideways and up.’ This gradual distribution pattern contrasts sharply with historical precedents, particularly the 2017-2018 cycle when the share of coins last active more than a year ago rolled over violently as price spiked and then collapsed.

CryptoQuant head of research Julio Moreno provided additional context by reframing the dynamic as ‘1-year inactive supply drawdown’ measured in percentage points of total supply. His analysis quantified the last three major cycles: the 2017-2018 period saw 1-year inactive supply decline by about 20 percentage points of total supply, while the 2021 cycle experienced approximately a 10 percentage point drawdown. The current 2024-2025 period has again seen roughly a 10 percentage point reduction, meaning long-term holders have already released supply volume comparable to the 2021 cycle, though still well below the 2017-2018 peak.

The gradual selling pattern aligns with what Kuiper describes hearing from the client side. ‘Bitcoin’s performance has recently lagged gold’s, even the S&P, and people are getting tired,’ he wrote. Many investors had positioned for a textbook four-year cycle blow-off top and were ‘waiting to sell into the historically strong seasonality of October and now November.’ When October’s typical strength failed to materialize and year-end approached, ‘long-term holders are looking to make year-end tax and positional changes, calling it a day with the gains they already have.’

This psychological dynamic explains the difference in selling tempo between cycles. Rather than the short burst of profit-taking typically seen at market peaks, the current environment features sustained distribution over a longer, choppier price path. The result is a market that absorbs roughly a 10-percentage-point reduction in inactive supply without the euphoric distribution phases that characterized previous cycles. Kuiper welcomed Moreno’s alternative visualization of this dynamic, replying simply: ‘Great chart!’ while noting he will be ‘watching this slope along with some other metrics to gauge seller exhaustion.’

For now, Kuiper argues that ‘the positive fundamental developments and lackluster price action continue to diverge.’ The persistent selling from long-term holders, while more measured than in previous cycles, continues to pressure prices even as institutional adoption through ETFs provides consistent buying support. This creates a tension between fundamental bullish developments and technical selling pressure that will likely resolve only when long-term holder distribution exhausts itself or accelerating institutional demand overwhelms the available supply.