The on-chain analytics firm Glassnode has shed light on the growing sell-side pressure that may emerge from Bitcoin long-term holders as the cryptocurrency approaches key price levels.
Bitcoin Long-Term Holder Profit Will Hit 350% At $99,900
In its latest weekly report, Glassnode has analyzed recent trends concerning Bitcoin long-term holders (LTHs). These holders are individuals who have maintained their investments for over 155 days, distinguishing them from short-term holders (STHs).
The LTHs form one of the primary cohorts of Bitcoin investors, with their tendency to hold assets for longer periods leading to a firm commitment compared to their short-term counterparts.
The following chart illustrates the evolution of the total supply held by these resilient investors over the last couple of years.
The graph indicates a notable increase in Bitcoin LTH supply over the past two months, suggesting that some STHs have transitioned into the LTH cohort. Throughout this period, the total has surged by 254,000 BTC.
While LTHs are generally regarded as steadfast, their reluctance to sell is not absolute. Historical data shows that they have taken profits during significant price rallies, as indicated by the chart.
Currently, Bitcoin appears to be attempting a bullish resurgence; however, the ongoing increase in LTH Supply hints that this group has yet to make a move to sell.
Looking ahead, insights from historical patterns might shed light on potential selling behavior for these investors.
The chart provided by Glassnode features data about the average cost basis of LTHs and various price points correlated with specific profit/loss thresholds for this group.
At present, the Bitcoin price significantly exceeds the LTH Realized Price, indicating that these investors are experiencing substantial profits. Nevertheless, they appear unwilling to divest their holdings just yet.
When might this resolve change? According to the report:
“Historically speaking, the Long-Term Holder cohort typically ramps up their spending pressure when the average member is holding a +350% unrealized profit margin.”
Based on their current cost basis, it is anticipated that LTHs will reach the 350% profit threshold when Bitcoin hits the $99,900 mark. If Bitcoin’s upward trajectory continues to this extent, the cryptocurrency could face notable selling pressure from this cohort of holders.
BTC Price
As of this writing, Bitcoin is trading around $96,500, reflecting a 4% increase over the past week.
