Despite Bitcoin’s impressive journey beyond $52,000 in just two years, the cryptocurrency seems to have hit a roadblock recently. Trading below this significant psychological threshold, the overall sentiment remains positive. Recent data reveals an interesting pattern among long-term holders of Bitcoin. These investors have collectively sold approximately 200,000 BTC since the beginning of the year. This trend has persisted for almost three months, with their balances consistently decreasing over this period.
Comparing Past Bull Markets
When comparing the current situation to the previous bull market, there is a noticeable difference in the rate at which Bitcoin holdings are being reduced by investors. During the last bull run, holders decreased their BTC balances by around 15%. However, in the current scenario, the decrease is only about 1.5%. This indicates that while long-term holders are still selling some of their Bitcoin, they are doing so at a much slower pace than before, suggesting a more cautious approach in the current market conditions.
The selling by long-term holders has been offset by significant accumulation by various investor groups. According to Ki Young Ju, CEO of CryptoQuant, Bitcoin inflows into accumulation addresses have hit an all-time high of 25,300 BTC. These addresses exhibit specific characteristics such as no outgoing transactions, holding a balance exceeding 10 BTC, and consistent activity over seven years. This suggests a deliberate effort by major holders to accumulate Bitcoin well before anticipated price increases, rather than waiting for market peaks.
Shift in Investor Behavior
Since mid-March 2020, there has been a noticeable decline in Bitcoin held on exchanges, indicating a shift in investor behavior. Initially, over 17% of Bitcoin’s supply was on trading platforms, a record high. However, this percentage gradually decreased during Bitcoin’s 2021 bull run, reaching its lowest level since April 2018. Glassnode data from 2024 shows a continual decrease in exchange-held Bitcoin, with BTC on trading platforms falling from 2.356 million to 2.314 million from January 1st to February 19th. As a result, the percentage of Bitcoin’s supply on exchanges decreased from 12.03% to 11.79% year-to-date.
Recent whale activity saw over 18,000 BTC, valued at approximately $1 billion, being moved from Coinbase to multiple non-exchange addresses, suspected to be custodial wallets. This movement raises speculation about the intentions of these large holders and their strategies in the current Bitcoin market landscape.
The current state of Bitcoin reflects a complex interplay between long-term holders, strategic investors, and shifting market dynamics. While some holders are selling their Bitcoin, others are actively accumulating, indicating a cautious yet optimistic sentiment in the overall cryptocurrency market.