Bitcoin Faces Pressure as Long-Term Holders Shift to Selling at $118K
Bitcoin’s recent record-setting rally has triggered a notable shift in investor behavior, with long-term holders (LTHs) now offloading their stash, marking a potential inflection point in the market.
On-chain data shows that LTHs, who typically hold Bitcoin for more than 155 days, have shed 52,000 BTC since the price reached its latest peak.
Long-Term Holders Mirror Previous Distribution Cycles
On July 29, analyst Axel Adler Jr. highlighted on X that LTH supply has dropped by 52,000 BTC at the $118,000 level, signaling a decisive shift from accumulation to distribution.
“The shift in balance from accumulation to distribution exactly repeats the LTH pattern from fall 2024 when the price rose from $65K to $100K,” Adler noted, suggesting that profit-taking could intensify as prices climb further.
This activity has also coincided with mounting pressure on short-term holders (STHs). According to recent analysis by CryptoQuant, wallets holding BTC for one to three months now sit on just 13% unrealized profits, down from 69% earlier in the cycle and a fraction of the 232% and 150% gains seen at the 2012 and 2021 peaks.
Adding to the complexity, Matrixport also warned of a potential “tactical pause” for Bitcoin as macro events, including the Federal Reserve’s rate decision and a White House report on digital assets, loom over the market.
Historically, August and September have been among Bitcoin’s weakest months, compounding the risk of a near-term pullback despite a broadly bullish outlook for the end of the year.
Price Action and Market Sentiment
At the time of this writing, BTC was trading at $118,979, up slightly by 0.6% in the last seven days and 10.8% over the past month. It has traded in a tight 24-hour range between $117,498 and $119,026, reflecting waning momentum after a strong mid-July pump. While the asset is still 71% higher year-over-year, it remains 3.2% below its all-time high, and the shift in holder behavior is starting to weigh on sentiment.
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However, some market watchers remain unfazed. Rekt Capital, for instance, noted on July 28 that Bitcoin’s weekly close above $119,200 had formed a bullish “flag” breakout structure, potentially paving the way for further gains if the level is successfully retested as support.
Meanwhile, fellow analyst CrypNeuvo flagged a potential short-term dip toward $114,300 to fill a CME gap before any renewed push higher.
If history repeats, this distribution period could provide an entry point for strategic buyers. But with LTH selling accelerating and short-term profits thinning, BTC’s next move hinges on whether it can hold $118,000, or risk a sharper shakeout before its next leg up.
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