Data shows that the price of bitcoin has been struggling to stay above $102,000 over recent days. This is because there appears to be an imbalance between sales pressure and new demand.
CryptoQuant data on the blockchain shows that, while long-term owners have taken active profits in recent months, there is a limited market capacity to absorb those sales. The market is not able to absorb the sell-offs of long-term holders, as it did in previous bull runs when rising demand could offset an increase in activity by these investors.
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The rising pressure on long-term holders to sell mirrors past bull cycles
CryptoQuant’s on-chain analysis platform, CryptoQuant. was initially shared by Julio Moreno is the head of CryptoQuant’s research and he shows that Bitcoin holders are changing their behavior in a way that can influence its next moves.
Julio Moreno said that LTH selling, or the sale of long-term holders (LTHs), is common in bull markets. This occurs when investors sell their Bitcoins as Bitcoin reaches new highs. CryptoQuant’s data indicates that since October, the amount of LTH spend over a 30-day period, as represented by the violet line on the graph below, is increasing.
Bitcoin prices are now at new highs, following previous bullish rallies, like those in 2024 when demand expanded and profit-taking occurred.
Moreno posted a chart that shows green regions representing positive periods of apparent growth in demand and red zones indicating contraction. During January to March 2024 and November to December 2024, LTH selloffs occurred as demand expanded.
Bitcoin Long-term Holder Spending
However, since October 20,25 this trend has reversed. Demand has declined even as LTH sales increased. This shows that the market is less able to absorb these selling pressures. Bitcoin has struggled to maintain its position over $102,000. This suggests that the price may be losing momentum.
The next rally could be delayed if the demand is weak.
Moreno said that it’s not just about the number of holders who are selling their shares, but also whether the demand can grow at the same pace.
In times of strong demand, the supply coming from long-term investors can lead to a healthy consolidation prior to another surge in prices. If demand falls behind the market, there tends be to long corrections and sideways movements.
Spot Bitcoin ETFs have experienced a significant slowdown of inflows. Data from SosoValue The chart below shows the net outflow of US-based Spot Bitcoin ETFS on Friday, Nov. 7, which was one of their largest ever single-day outflows.
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If the apparent demand for Bitcoin does not begin to improve in the next few weeks, and the LTH sales continue then it could continue to affect the price and delay the next leg of Bitcoin’s rally. If this is the case, Bitcoin could continue to be consolidated between $101,000-$103,000 throughout November.
Bitcoin has dropped by 0.6% since the previous 24 hours to $101,655.
Chart by TradingView. Image from Unsplash.
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Source: www.newsbtc.com
