PiCK
[Analysis] Bitcoin Long-Term Holder Selling Jumps 62%, Signaling More Profit-Taking Pressure
Summary
- The 30-day distribution volume of Bitcoin long-term holders (LTH) rose 61.5%, reaching the highest level this year.
- The long-term holder MVRV ratio reached as high as 1.64 and stood at 1.60 as of Aug. 31, indicating holders were sitting on gains of about 60% versus their average purchase price.
- Adler wrote that if long-term holders maintain strong profitability, additional profit-taking could continue, with the key issue being how much of the increased selling supply can be absorbed by new demand.
Forecast Trend Report by Period
Bitcoin has rebounded after a short squeeze, but selling by long-term holders has also risen sharply, according to an on-chain analysis.
In a newsletter published Sept. 1, on-chain analyst Axel Adler Jr. wrote that the 30-day distribution volume from Bitcoin long-term holders climbed 61.5% to 281,900 BTC on Aug. 28 from 174,500 BTC on Aug. 18. That marked the highest level this year.
The price surge has boosted profitability for long-term holders, creating more favorable conditions for profit-taking. The long-term holder MVRV ratio rose to 1.64 on Aug. 27 from 1.31 on Aug. 18, and was 1.60 on Aug. 31.
An MVRV reading of 1.60 means the market value of Bitcoin held by long-term holders is about 60% above their average purchase price.
As long as long-term holders remain highly profitable, additional profit-taking could follow if prices stay stable, Adler wrote. The key question is how much of the increased selling supply can be absorbed by new demand.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.