Originally published on: November 21, 2024
Bitcoin’s journey to $100,000 is causing some long-term holders to consider selling off their holdings, risking a potential price correction. Recent data from Glassnode suggests that institutional buying is crucial to sustaining the current BTC price surge.
According to Glassnode’s analysis, long-term holders (LTHs) have started reducing their BTC exposure, indicating a shift in market sentiment. These LTHs, who have held onto their BTC for at least 155 days, are now net sellers after months of accumulation.
The decreasing LTH net position, evident in the data showing a 245,000 BTC reduction compared to the previous month, highlights a concerning trend for Bitcoin’s price stability. Crypto analyst Miles Deutscher warns that without significant buying pressure, the market could succumb to the selling pressure from long-term holders.
One key source of buying pressure could be the United States spot Bitcoin exchange-traded funds (ETFs), which have been experiencing record net inflows. Despite the recent launch of options trading and over $770 million in net inflows on Nov. 20 alone, the ETFs are struggling to counteract the selling activity from LTHs.
Glassnode’s latest analysis also points out the market value to realized value (MVRV) metric, indicating an overheated state similar to previous peaks in Bitcoin’s price. While Bull markets often experience extended periods of heated metrics, large capital inflows are essential to absorb sell-side pressure and maintain stability.
As Bitcoin holders face increasing profitability, the market dynamics are expected to shift, potentially leading to further sell-side pressure. It is crucial for investors to conduct their own research and consider the risks involved in every trading decision.
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