Key Points
- The long-term holder (LTH) supply of Bitcoin is showing a downward trend, indicating a potential shift in the market.
- Bitcoin mid-size whales are back in distribution mode, with net outflows increasing over recent weeks.
Bitcoin’s weekly chart is marked by range-bound price action, liquidity traps, and a significant amount of uncertainty.
This uncertainty is reflected in the behavior of Bitcoin’s long-term holders (LTH). Traditionally, these holders have adopted a “buy the fear, sell the greed” strategy. However, the current trend indicates they are selling into strength rather than buying up panic.
Change in Bitcoin Holder Behavior
According to a CryptoQuant chart, Bitcoin’s mid-size whales, who hold between 100 and 1,000 BTC, have shifted back to distribution mode. This is evidenced by the increase in net outflows over the past few weeks.
Around 130 BTC have been offloaded by this group since May 10, translating to approximately $13.5 million in realized value at an average price of $103.5k. This is the first sustained net outflow in two months, suggesting a notable shift in the behavior of smart money.
Five months ago, when Bitcoin was trading near $104.6k, the LTH supply was at 14.09 million. Currently, despite similar spot prices, the LTH supply has increased to 14.28 million. However, the momentum is changing, with the LTH-held supply declining by about 20,000 BTC in less than a week.
Market Shifts Test Conviction
Bitcoin has wicked down to the $100k handle twice on a weekly basis, indicating heavy sell-side pressure. However, bears have not been able to force a clean break below this level.
Despite this, demand kicked in strongly around the $104k mark, with nearly 10,000 BTC pulled off exchanges. This suggests active dip-buying rather than passive HODLing. Retail capital appears to view this level as a value territory, anticipating that the current “correction” is a precursor to the next upward move.
Institutions are also supporting this move by absorbing distribution from significant Bitcoin cohorts like mid-size whales. However, it is important to note that this does not confirm a market bottom. Bitcoin is currently in a battle for control, with the $100k mark serving as a key pivot.
Therefore, it is crucial to closely monitor these flows and supply dynamics to determine whether bulls maintain the upper hand or if bears are preparing for a second round in the coming days.
