- Bitcoin’s LTHs are distributing slower, signaling a potential shift in market sentiment
- Historical trends suggest reduced LTH selling pressure often leads to upward price momentum
Bitcoin’s [BTC] price seemed to be hovering around 12% below its all-time high at press time, leaving many to wonder about the future direction of the market. Despite this dip, however, LTHs continue to distribute their Bitcoin holdings, albeit at a slower pace.
In fact, on-chain data revealed a key shift – While LTHs are still selling, the rate of distribution has begun to slow. More importantly, the 30-day percent change in LTH supply suggested that this distribution cycle may have hit its peak, signaling that the selling pressure could soon ease.
LTH distribution trends
Source: Glassnode
Recent data revealed that LTHs have continued to distribute their Bitcoin, even with the price just 12% below its all-time high. This ongoing selling behavior means that these long-term holders are cautious, possibly driven by macroeconomic factors or a strategy of taking profits during uncertain market conditions. Despite this continued distribution, the pace of selling has started to slow.
There is a declining 30-day change in LTH supply, suggesting that the peak of LTH selling pressure may have passed. This shift can be attributed to improving market sentiment and the stabilization of external pressures, which may have eased some of the concerns that prompted previous selling.
30-Day percent change in LTH supply
The 30-day percent change in LTH supply measures the net accumulation or distribution of Bitcoin by LTHs over a rolling monthly period. When this metric rises, it often signals accumulation, while a decline typically indicates active distribution.
The data revealed a plateau in LTH distribution, suggesting the selling phase may be ending. Historically, such slowdowns precede periods of reduced selling pressure. As LTHs reduce distribution, downward pressure on Bitcoin could ease, allowing for consolidation or a potential bullish reversal.
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Comparison to previous cycles and potential implications
When comparing the current trend to previous cycles, it’s clear that similar distribution slowdowns have marked the end of bear markets or the start of bull markets. In 2015, 2019, and 2020, LTH distribution slowdowns were followed by reduced market volatility, setting the stage for upward trends. During these times, Bitcoin saw greater stability, higher confidence, and fresh inflows from new investors – All contributing to price hikes.
If this trend follows past cycles, Bitcoin may stabilize at its press time price before moving upwards. The shift in LTH behavior and reduced selling pressure could signal the start of a price rally. This could lead to bullish momentum or extended consolidation, depending on market conditions.
As history has shown, such moments of reduced selling pressure often set the stage for Bitcoin to achieve new highs. However, whether the market follows this pattern again remains to be seen.
