On-chain data shows the Bitcoin long-term holders have started a phase of distribution recently. Here's what this could mean for BTC's price.

On-chain data shows a new phase of distribution has begun for Bitcoin long-term holders, with these investors starting to sell their holdings once again.

Bitcoin Long-Term Holders Record Just Sold Over 177,000 Tokens

As CryptoQuant community analyst Maartunn pointed out in a new article on X, old coins have recently experienced negative balance changes. Below is a chart from market intelligence platform IntoTheBlock, cited by analysts, showing the movement of balances in the Bitcoin network across different groups of holders.

The groups here are divided based on holding time: investors who purchased the token within the past month belong to the

In the context of the current theme, neither of these is in focus; the relevant group is the third group (blue), which contains investors who have held for longer than twelve months.

Statistically speaking, the longer an investor holds a token, the less likely it is to sell said token at any point in time. Therefore, the 12+ month cohort will contain the most committed investors in the network.

It is clear from the chart that these HODLers have been busy accumulating during the 2022 bear market and 2023 recovery rally, but this trend has turned in 2024.

In the first quarter of this year, the balance movement of the Bitcoin group turned significantly into the red, indicating that long-term holders are making profits.

As the cryptocurrency’s consolidation following new all-time highs (ATH) continued, it was not until finally, the selling pressure on these diamond hands dried up that their balance movements fully reached neutral levels.

Recently, as the bullish wave returned to Bitcoin, the balance movement of this group turned red again, indicating that these HODLers have started selling again.

As for what this means for cryptocurrencies, perhaps historical patterns can shed some light. “Long-term holder activity often acts as a contrarian indicator,” Maartunn said. “LTH tends to buy (increase holdings) during price declines and sell (decrease holdings) during price increases.”

However, as you can see from the chart, while LTH timed its sell to coincide with the bull run, the actual top for the cryptocurrency did not occur until long into their distribution. This could potentially indicate that there is room available on the current rally, before reaching a ceiling.

What may invalidate this pattern, however, is that LTH selling has been smaller this cycle, as noted by IntoTheBlock in an X article.

"While long-term holders are selling, it is less aggressive than past bull market peaks," the analyst firm noted. Therefore, the current Bitcoin cycle may be establishing a new dynamic in the market.

BTC Price

As of this writing, Bitcoin is trading at around $68,800, down more than 3% from last week.

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