Bitcoin's Path to $120K: Long-Term Holder Strategy Shift
Bitcoin's Bullish Momentum: Long-Term Holders Take Charge
Bitcoin [BTC] is approaching its all-time high, trading less than $3,000 away from its peak of $123,091 (CoinMarketCap). Recent analysis points to a significant factor driving this surge: a change in strategy among long-term holders (LTH).
Key takeaways:
- Bitcoin daily sales from long-term holders have dipped below $1 billion, a level consistently exceeded last month.
- On-chain metrics confirm a return to holding, with reduced exposure on exchanges.
Reduced Selling Pressure
The current market strength is largely attributed to reduced selling pressure from long-term holders. Buy activity is gradually returning, bolstering Bitcoin's upward trajectory.
Long-Term Holders Turning Bullish?
Glassnode's recent report highlights a correlation between Bitcoin's LTH sales and its push towards $120,000. Trading volume has surged 32.95% to $79 billion in the past day (CoinMarketCap).
Notably, LTHs have decreased their daily Bitcoin offloads from an average of $1 billion in July to hundreds of millions in August. This indicates renewed confidence and potentially increasing demand from this investor group.
Source: Glassnode
Unlike the November 2024 peak, where ETF holders (6–12 month range) drove the decline, recent selling originates from holders in the 3–5 year range taking profits. More recent holders are largely maintaining their positions, contributing to bullish sentiment.
Shift to Holding Bitcoin
Analysis indicates that investors previously responsible for pushing daily sales above $1 billion are now transitioning towards long-term holding. Binary CDD (Coin Days Destroyed) data, which monitors LTH activity, has dropped to zero, suggesting stronger holding behavior.
Source: CryptoQuant
Fund Flow Ratio data from CryptoQuant further supports this trend, revealing reduced Bitcoin interaction with exchanges. The ratio has fallen to 0.057, indicating fewer assets moving to exchanges.
Typically, lower exchange inflows correlate with buying interest, as major holders prioritize holding over immediate sell-offs.
Resuming Bitcoin Buys
The spot market is exhibiting bullish signals. Investors have recently acquired $51 million worth of Bitcoin, signifying a change in market dynamics. This follows a prior sell-off of $242 million on August 10th (CoinGlass).
Source: CoinGlass
Continued accumulation and a sustained shift towards holding among long-term investors could propel Bitcoin to break its all-time high and enter a new phase of price discovery.
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