Key Points
- Long-term HODLers (LTHs) are selling Bitcoin (BTC), reducing their holdings by 11% in a year.
- This move could indicate market maturity or potentially signal trouble for Bitcoin.
Bitcoin’s long-term holders, known as LTHs, have been gradually reducing their holdings over the past year. A year ago, they held 13.84M Bitcoin at an average price of $42k, but today, that figure has dropped to 12.22M BTC. This is an 11% decrease in just one year.
Change in LTH Behavior
This change in behavior could be interpreted in two ways. Some might consider it a red flag, while others might view it as a sign of market maturity. These LTHs are known for their contrarian strategy – buying when others panic and sell.
In 2023, BTC started Q1 at $16.6k, with 14.93 million BTC in LTH wallets. By the end of the year, BTC had risen to $44k, and LTH supply increased to 15.85 million. However, in 2024, a significant shift occurred. LTHs began a massive distribution phase, with holdings falling from 15.8 million to 14.27 million in Q4 alone.
Impact of LTHs Exit
The impact of this exit on the BTC market is yet to be seen. Recently, Bitcoin dipped to $89k, a level not seen since mid-November, before quickly bouncing back to close the session at $95k. This recovery was aided significantly by large institutions like MicroStrategy (MSTR), who made two significant BTC purchases in the first two weeks of 2025.
However, Bitcoin’s Long-Term Holder (LTH) SOPR has shown a pattern of diminishing returns after each halving. As Bitcoin’s supply tightens, LTHs are seeing smaller profits. In 2013, the average LTH SOPR was 9.72, but by 2021, it had dropped to 3.87. If this trend continues, we could see a further squeeze to just 2.44 by 2025.
In this scenario, LTHs face a choice – accumulate more BTC to make the same profits, or exit before the squeeze gets tighter. It seems that many are choosing to exit. The pressure is building, and to prevent a massive pullback, a supply shock may be needed. The responsibility for this now lies in the hands of these big players.
