[Analysis] Bitcoin Long-Term Holders Cut Holdings for Seven Straight Weeks, but Market Absorbs Supply
Summary
- Bitcoin long-term holders have reduced their holdings for seven straight weeks, but market demand has absorbed the supply and the price uptrend has continued.
- The change in long-term holder holdings widened to -73,400 BTC, but current selling pressure remains low compared with the -1.07 million BTC seen in November last year.
- As long-term holder SOPR rose as high as 1.24 and profit-taking continued, Adler said the market could face trouble absorbing supply if the decline in holdings expands to several hundred thousand BTC and Bitcoin's price stops rising.
Bitcoin long-term holders have reduced their holdings for seven straight weeks, but market demand is absorbing the supply and supporting the price uptrend, according to an analysis.
Crypto analyst Axel Adler Jr. wrote in a newsletter on Oct. 6 that the change in Bitcoin long-term holder, or LTH, holdings has remained negative for seven consecutive weeks after turning below zero on Aug. 17.
As of Sept. 28, the change in long-term holder holdings stood at -73,400 BTC, a sharp deterioration from -1,100 BTC a week earlier. Even so, current selling pressure remains well below the -1.07 million BTC recorded in November last year.
Long-term holders have also continued taking profits. LTH SOPR rose to 1.24 on Sept. 21, the highest level since January, and stood at 1.18 on Sept. 28. That means the Bitcoin moved on that date realized an average profit of about 18% versus its purchase price.
Adler wrote that long-term holders are reducing positions and locking in gains as prices rise, but that market demand has so far absorbed the incoming supply.
He added that if the decline in long-term holder holdings widens again to several hundred thousand BTC while Bitcoin's price advance stalls or reverses, it could be a sign that the market is struggling to absorb the selling.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.