Key Points
- Bitcoin (BTC) investors are holding off on profit-taking, even with BTC price near $70,000.
- Long-term holders (LTHs) are not selling BTC at a rate that would make the current bull market unsustainable.
Bitcoin investors are proving their resilience by resisting the urge to take profit, even as the price of Bitcoin approaches $70,000.
Despite an average profit of 3.5 times, long-term holders (LTHs) are not selling their Bitcoin at a rate that would jeopardize the ongoing bull market.
Understanding LTHs
LTHs are defined as wallets that have held Bitcoin for at least 155 days. This group is considered to be less speculative and more steady in the Bitcoin investor spectrum.
As the price of Bitcoin increases due to renewed buying pressure, the potential selling pressure from LTHs also grows. The unrealized profit of the LTH group can be seen as a measure of their incentive to sell, and their realized profit can be used to assess actual sell-side.
Market Value to Realized Value
Using the market value to realized value (MVRV) metric, it is predicted that LTHs will soon enter historically high levels of unrealized profit. This could significantly increase their incentive to sell, leading to sell-side pressure that could potentially exhaust the demand side.
However, taking into account March’s all-time high, there is room for optimism should Bitcoin price discovery return. Even at the $73,800 peak, LTHs were not distributing to the market as heavily as during previous bull market peaks.
The latest data shows that the net sell pressure peaked at 519k BTC/month in late March, with approximately 20% of this originating from Grayscale ETF holders.
The ongoing selling by investors in the Grayscale Bitcoin Trust (GBTC) was also noted. This institutional investment vehicle recently lost its top position among spot Bitcoin ETFs by assets under management.
Looking ahead, it is expected that LTHs will continue the investment trend that has been resurging since the end of last year. Following significant long-term holder investor distribution into the $73k all-time high, sell-side pressure has noticeably contracted. LTHs have since started to re-accumulate coins for the first time since December 2023.
