Bitcoin (BTC) Price: Is Long-Term Holder Selloff A Blessing In Disguise?

The cryptocurrency market showed signs of a rebound after a string of outflows with Bitcoin (BTC) recording several large-scale exits. On-chain data shows an increasing number of long-term Bitcoin holders moving assets following present market situations.

Analysts at crypto data analyst firm CryptoQuant point to a change in BTC supply rate from long-holders to see how these large investors view the present market. At the moment, this class of holders is selling their assets rapidly plunging the price of Bitcoin.

Bitcoin Records High Liquidations

Bitcoin notched significant gains last year following anticipation of a spot ETF in the United States. This occurred as a new investment window will allow traditional investors to increase their exposure to the market. This year the approval by the Securities and Exchange Commission on Jan 11 spiked the puberty of the asset above $72,000 tapping a new all-time high. 

However recent liquidations and macroeconomic factors have occasioned a price drop leading to weakened investor sentiment in the market. On both sides of the coin, analysts have commented on the impact and benefit of the sale of crypto assets long-term.

Long-Term Holders Eye Profit

A major reason for the rapid sale of assets is to gain profits after a bullish run. Coming out of the 2022 bear market, BTC lost about 55% of its value. A rise above $70,000 is a wide margin for some holders seeking to make profits with the switch in the market. 

“Long-term holders may be taking profits after a significant run-up in prices, similar to what occurred during the early stages of the 2021 bull market when Bitcoin surpassed its 2018 all-time high. Profit-taking is a common strategy among investors, especially after witnessing substantial gains in the value of their investments.” 

Digital asset commentators view the price drop as a good entry point ahead of bullish activities like the upcoming Bitcoin halving. A reduction in supply coupled with bullish activity will create a spike taking the asset to new highs. Long-term Bitcoin holders could rebalance their positions ahead of the halving leading to outflows. 

Increased demand can help the asset’s price in the long run while experts also view sales to re-invest accumulated profits at discounted prices. This can be seen as miners moved assets from Bitcoin reserves to centralized exchanges. 

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