Recent on-chain data shows that a relevant segment of Bitcoin investors, known as long-term holders, continues to move out of their market positions.
LTH proactively switches to distribution
In a November 1 post on social media platform Kesmeci’s analysis is based on the Long Term Holder Net Position Change Index, which tracks the net buying and selling behavior of long-term Bitcoin investors over a 30-day period.
Related article: Bitcoin at “do-or-die” level, cycle faces first real test: Analyst
For this class of investors, there are more market participants buying Bitcoin than selling it, so a positive value is usually interpreted as a sign that LTH is in a net accumulation phase. Conversely, if the net position change indicator for long-term holders is negative, it means that LTH is in the distribution phase.
In his post, Kesmeci explained that the indicator is gaining momentum on the sell side. In the highlighted chart, it appears that around 400,000 BTC was sold in the past 30 days. Interestingly, LTH doesn’t seem to be slowing down its sales. This behavior is equally concerning.
If long-term Bitcoin investors hesitate to sell their holdings, Bitcoin could bottom out at the local price. This is because this usually signals renewed interest and “smart money” positioning for the next cycle. However, if this circulation momentum continues to grow, the premium cryptocurrency could continue to fall as long-term holders continue to apply further bearish pressure.
LTH 2.2% supply decline is relatively slow — Analyst
In another X post, crypto critic Darkforst shed light on the implications of the change in Bitcoin’s LTH behavior. According to the analyst, the 2.2% “moderate decline” in Bitcoin LTH supply in October is not much cause for concern, especially when compared to 2024 levels.
As of March 2024, Bitcoin’s LTH supply has decreased by approximately 5.05%. In December, the decline was even more significant, by approximately 5.2%. Therefore, Dirkforst suggested that the current distribution the market is seeing could be a result of early profit-taking, and the market could soon see a rebound in Bitcoin prices.
Nevertheless, the trend in the net position of long-term holders is something to be monitored, as a move back to a neutral reading could signal the beginning of an accumulation phase and a subsequent reversal in price.
As of this writing, BTC is worth around $110,750, but there has been no significant movement in the past 24 hours.
