Since mid-July, Bitcoin (BTC) has risen above $120,000. Prices hit a new high of $124,157 early on Thursday, but then returned to $123,000, missing momentum.
This raises the question: Who is cashing out of Bitcoin and putting sales pressure on the market? According to the observer, the answer lies in blockchain data, indicating that the old wallet is liquidating its holdings.
“It could be linked to intensive sales pressure from long-term holders that have recently accelerated sales,” Sentora Sentora’s senior blockchain analyst Gabriel Halm told Coindesk.
“Historically, long-term holder sales phases have been neatly defined within the Bitcoin cycle. However, this time it suggests that accumulation during the second quarter pullback may have shifted the structure of the market.”
According to data source Bitcoin Magazine, BTC supply controlled by long-term holders or wallets with a history of owning coins for more than 155 days has been reduced by over 300,000 BTC in four weeks.
Several dormant wallets, which have been inactive for over a decade, have been active in the last four weeks, perhaps in profitable operations, moving coins in chains for the first time in years.
Blockchain analytics firm GlassNode said last week that long-term holder profits continue at a slower rate than in July.
“The realization of $BTC profits by long-term holders (7D SMAs) slowed in August after consistently running in July of over $100 million per day. This is one of the largest profit-taking periods on record.”
Sam Gaer, chief investment officer of MONARQ Asset Management’s Directional Fund, said supply from ancient wallets was upside down, but it matches the pattern seen when Saxony, Germany, settled its holdings last year.
“BTC price levels tended to consolidate on psychological levels (take $100,000, $110,000, $120,000, and $120,000), especially ATH levels. This same pattern was seen at the $110,000 level last month as it touched on the highest ever high in the 112 area and drifted low several times,” Gaer said.
The sustained sales of higher strike calls by the agency could have affected rally speed. They usually do so to gain additional yields in addition to holdings in the spot market. According to Gaer, the so-called call override caused a volatility meltdown. The implicit volatility that represents the expected price turbulence over a given period is driven by the demand for options.
“The call overriding activity by long-term holders continues in a seemingly unabated way. In my experience, Vol Crush, a teenager who leaves BTC on weekend vols, continues.
What’s next?
The path of minimal resistance remains the opposite thanks to strong dip demand and signs of macroeconomic tailwinds.
“1.88 million addresses have bought an average of $1.3 million BTC for $118,000, indicating a strong demand group that has so far been preventing a deep pullback,” Halm told Coindesk.
Speaking of macros, the market is becoming increasingly comfortable with the idea that new normal inflation in the post-Covid world is well above the Fed’s 2% target, and that central banks are hoping to cut fees in September.
Vtrader founder Steve Gregory expects renewed funds from the ether to Bitcoin.
“As Bitcoin’s three-month volatility reached its lowest since September 2023, we could see a spin-up to Bitcoin and a break of $120,000. What’s more, we’re seeing 95% of our ETH wallets profitable, indicating that traders could have a logical rotation into BTC.
