On-chain data shows that long-term bitcoin holders are selling. Here is whether the current level of liquidation is enough to reach a maximum price or not.
Long-term bitcoin holders have been selling big recently
in a new <a target="_blank" href="https://x.com/ali_charts/status/1868455501140521439″ target=”_blank”>mail On x, analyst Ali Martinez discussed the historical trend in long-term holders' holdings relative to bitcoin's peak. “Long-term holders” (LTH) refer to btc investors who have held their coins for more than 155 days.
LTHs represent one of the two main divisions of the btc market based on holding time, while the other group is known as short-term holders (STH).
Historically, the latter group has proven to contain the market's weak hands, while the former is made up of HODLers who barely react to price rallies and drops.
As such, selling from STHs is usually unimportant, but selling from LTHs may be, as it is not a particularly common event. One way to track the behavior of diamond hands is through their net position change.
Net position change is an on-chain metric that measures the total amount of bitcoin entering or exiting the LTH cohort. Below is the graph of the indicator shared by the analyst showing the trend of its value throughout the history of the cryptocurrency.
<img src="https://technicalterrence.com/wp-content/uploads/2024/12/Bitcoin-up-here-What-the-HODLer39s-Historical-Liquidation-Pattern-Says.jpeg" alt="bitcoin LTH Net Position Change” />
As shown in the chart above, bitcoin's LTH net position change has seen a sharp decline into negative territory in recent weeks, implying that a net amount of supply has been leaving the cohort.
It is not the first time this year that the indicator shows this trend, since something similar was also observed during the first quarter of this year. In the graph, Martínez has highlighted this and other older examples of this trend.
It would appear that major LTH sell-offs have generally coincided with some sort of top in the cryptocurrency. “Interestingly, in 2017 and 2021, its highest sales occurred just before the final stretch,” notes the analyst.
Therefore, if the current bull market is to show something similar, then it is possible that the current LTH sell-off is, in fact, just the beginning of that final leg that will lead to bitcoin's cyclical top.
Currently, the indicator is also not as negative as it was during the larger red peaks of the 2017 and 2021 bull runs, which could be another indication that the top has not yet arrived. However, it only remains to be seen whether the same pattern will repeat itself this time or not.
btc Price
bitcoin is back in all-time high (ATH) discovery mode as its price just set a new record above the $107,000 milestone.
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