Key points:
- Bitcoin long-term holders are about to hit a level of unrealized profit, which has traditionally caused them to sell.
- This level coincides with the return to a six-figure BTC price.
- Order book data suggests that bulls may not succeed in maintaining the upside.
Bitcoin (BTC) faces the risk of increased selling from long-term holders if prices continue to rise, according to on-chain analytics firm Glassnode. Their latest newsletter, “The Week Onchain,” highlights that long-term holders (LTHs) are currently sitting on nearly 350% unrealized profits.
Bitcoin Sell-Side Odds in Line for Crucial Test
With Bitcoin reaching multi-month highs, many holders may be tempted to take profits, including those known for their ‘diamond hands.’ Glassnode indicates that the aggregate unrealized profits for long-term holders are nearing 350%, a critical historical threshold.
Long-term holders, defined as entities holding Bitcoin for more than six months, often begin to sell when their profits reach this margin. According to Glassnode, the pivotal price area to monitor for shifts in their behavior is the $100,000 mark.
“Historically, the Long-Term Holder cohort typically ramps up their selling when the average member holds a +350% unrealized profit margin,” Glassnode elaborates. “At the $99.9k level, we can expect an uptick in sell-side pressure as we approach this zone, necessitating significant buy-side demand to sustain upward momentum.”
Trader Insights: BTC Price Upside Potential Appears Limited
After soaring to $97,500 this week, Bitcoin’s price is not yet convincing traders of a return to traditional bull market behavior. Data from Cointelegraph Markets Pro and TradingView indicates this price point is the highest since February 21.
Despite being over $20,000 above its recent lows, popular trader TheKingfisher cautioned that the order book liquidity suggests sellers might strike back. “A massive wall of LONG liquidations is stacked around $91k, while shorts above the current price of $96.6k are not significant,” the trader noted in a recent X post.
“This imbalance indicates a strong potential downside. There is high risk for longs at current levels, and upside fuel appears limited.”
Glassnode also highlights the importance of establishing key resistance and support levels, referencing the 111-day simple moving average and the aggregate cost basis of Bitcoin speculators, known as short-term holders (STHs).”
“The price has recently surged above both of these pricing models, attempting to consolidate within this zone, indicating a significant degree of strength. However, failing to break and hold these levels could revert the price back into bearish territory, leading many investors back into unrealized loss.”
This article does not contain investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research.
