The cryptocurrency market remains highly volatile, leading to a significant decline in Bitcoin’s price, now dipping below the $85,000 threshold after a minor uptick last week. With BTC facing substantial bearish pressure, investor sentiment has shifted dramatically, potentially impacting the future direction of the flagship asset.
Long-Term BTC Holders Cease Major Distribution Phase
Amidst Bitcoin’s struggle to regain critical levels, a significant trend has emerged among investors, particularly among long-term BTC holders. Veteran on-chain and macro analyst Axel Adler Jr. has identified this shift in investor sentiment through his recent data analysis.
Specifically, long-term Bitcoin holders seem to have concluded their distribution phase, potentially paving the way for renewed bullish trends. This cessation of the distribution phase indicates that selling pressure from long-term holders has decreased, restricting BTC’s market supply.
According to the macro analyst, the distribution by long-term holders represents the largest seen in recent years. After examining key metrics, Axel Adler pointed out that activity metrics have transitioned from high levels to lower levels, particularly in terms of selling and accumulation.
The reduction in supply is usually indicative of a new market cycle and stabilization, signaling a potentially positive outlook for the market. Additionally, if the demand for BTC rises, it could result in a supply squeeze in the forthcoming weeks.
In a separate post on X (formerly Twitter), the analyst noted that long-term holders have divested over 1.715 million BTC from the $60,000 price point. After analyzing the 30-day Net Position Change of Long-Term Bitcoin Holders, Axel Adler highlighted the substantial distribution by these long-term investors.
With the significant distribution phase concluding, the metric is approaching neutral levels, indicating that large-scale selling pressure has diminished. If this trend persists, the likelihood of BTC experiencing a rebound increases as long-term holders shift back to the accumulation phase.
A Decline In Bitcoin Selling Pressure On Crypto Exchanges
Despite ongoing bearish performance in BTC’s price, both investors and traders are growing optimistic about the asset’s future, resulting in a decrease in selling pressure. Axel Adler has disclosed that active selling by long-term holders has ceased on crypto exchanges.
In conjunction with the cessation of selling activity on exchanges, the monthly Moving Average inflow has dropped from 3.8% to approximately 1.4%. This reduction alleviates the downward pressure on Bitcoin, making this low level of selling activity from long-term holders an encouraging sign for price movement.
As of the time of this writing, BTC was trading at $81,995, reflecting a decline of more than 5% in the last 24 hours. Investors appear to be seizing the opportunity presented by the recent sharp drop, as trading volumes have surged by over 24% in the past day.
Image sourced from Unsplash, chart data from Tradingview.com
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