Cryptocurrency market intelligence firm Glassnode noted that many long-term holders (LTHs) are still waiting for higher prices before releasing more Bitcoin into circulation. According to their analysis, as Bitcoin surpassed the $75,600 mark, 100% of the 14 million BTC held by LTHs moved into profit, which prompted an increase in spending. This shift resulted in a notable decline of over 200,000 BTC from circulation since the all-time high breakout.
This pattern of long-term holders taking profits during strong price movements is a common occurrence, with many LTHs likely holding off on releasing more coins into the market until higher prices are reached. Despite this, a considerable amount of Bitcoin remains under LTH ownership.
In recent weeks, spot Bitcoin exchange-traded funds (ETFs) have played a key role in absorbing a majority of the sell-side pressure from LTHs. This reflects the growing influence of institutional demand in shaping the Bitcoin market. Since mid-October, weekly ETF inflows have ranged from $1 billion to $2 billion per week, marking a substantial increase in institutional investment. From October 8th to November 13th, ETFs absorbed approximately 128,000 BTC, or about 93% of the 137,000 BTC sold by LTHs. This highlights the critical role ETFs have in stabilizing the market during times of heightened selling.
However, since November 13th, LTH sell-side pressure has begun to surpass ETF inflows, creating an imbalance between supply and demand. This mirrors a similar trend seen in late February 2024, where such imbalances led to increased market volatility and consolidation.
As Unrealized Profits Among LTHs Grow, Increased Selling Activity Is Anticipated
Glassnode concluded, highlighting that Bitcoin’s recent rally above the $90,000 mark has been driven by capital inflows, with approximately $62.9 billion entering the digital asset market over the past 30 days. This surge in demand has largely been fueled by institutional investors, particularly through US Spot ETFs, possibly reflecting a shift in capital away from gold and silver.
Moreover, ETFs have played a critical role in this dynamic, absorbing more than 90% of the selling pressure from LTHs. However, as unrealized profits among LTHs continue to grow, more selling activity is expected. In the short term, this selling pressure has already exceeded the rate of ETF inflows.
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