The crypto market remains highly volatile, with Bitcoin’s price plunging below $85,000 after a brief upward push last week. This latest downturn has triggered bearish sentiment among investors, potentially shaping BTC’s short-term trajectory.
Despite the price drop, on-chain data suggests that selling pressure from long-term holders is easing, signaling a potential shift toward accumulation.
Long-Term Bitcoin Holders Pause Distribution Phase
As Bitcoin struggles to reclaim key resistance levels, a significant trend shift has emerged among long-term BTC holders.
On-chain and macro researcher Axel Adler Jr. noted that long-term investors have completed a major distribution phase, reducing the market’s selling pressure.
“The largest long-term holder distribution in recent years has now subsided, paving the way for renewed bullish momentum,” Adler reported.
The completion of this distribution cycle means that long-term investors are no longer offloading large amounts of BTC, effectively limiting new supply in the market.
Supply Squeeze Could Fuel Bitcoin’s Next Rally
Historically, a decline in BTC supply from long-term holders signals the start of a new market cycle and stabilization. If demand rises, this could trigger a supply squeeze, boosting Bitcoin’s price in the coming weeks.
Axel Adler’s analysis of on-chain data revealed that over 1.715 million BTC were distributed by long-term holders when BTC traded near $60,000.
However, the 30-day Net Position Change metric now suggests that the distribution phase is ending, with long-term holders shifting back into accumulation mode.
Selling Pressure on Crypto Exchanges Slows Down
Even as Bitcoin remains in a downtrend, market sentiment appears to be turning bullish due to a decline in selling pressure across crypto exchanges.
Adler’s research found that active selling by long-term holders has slowed, correlating with a drop in the monthly moving average inflow, which fell from 3.8% to 1.4%.
With fewer long-term holders selling, Bitcoin is experiencing less downward pressure, which could support a price recovery in the near term.
Bitcoin Price Outlook
At the time of writing, Bitcoin is trading at $81,995, reflecting a 5% drop in the last 24 hours. However, trading volume has surged by over 24%, indicating that investors are buying into the dip.
If long-term holders re-enter the accumulation phase, BTC could see a rebound, especially if market demand picks up amid tightening supply.
For now, investors are watching closely, as Bitcoin’s next major move may be just around the corner.
