The recent selling pressure seen in the market has given rise to theories that there may be a concerted action, or “coordinated attack,” by legacy Bitcoin (BTC) investors to cause the price of Bitcoin (BTC) to fall.
While some have suggested that so-called “old whales” are being sold off en masse or that digital assets are undergoing “quiet IPOs,” on-chain data reveals a more complex picture.
On-chain analytics firm Glassnode puts these movements into perspective. this complexity The difference lies in the difference between normal profit-taking behavior and the expected large capital outflow..
Long-term investors, those with historically profitable positions, have been consistently profitable throughout the current cycle, and their behavior is identical to all past cycles, Glassnod says.
As seen in the following graph, the current pattern (cycle 5) is not an anomaly, but rather a continuation of the distribution pattern seen in the previous cycle.
long-term bitcoin holders
The increase in the magnitude of profits experienced investors received after the historical maximum is consistent with previous cycle peaks. Glassnode emphasizes that this phenomenon is “not an anomaly, especially not a ‘skilled investor sell-off’, but rather a normal behavior of a bull market.”
Survey of average monthly spending of long-term Bitcoin holders (LTH) The distribution shows a constant upward trend. “Capital outflows have increased from approximately 12,500 BTC per day in early July to 26,500 BTC per day (30-day SMA) today,” the company details.
This steady increase in spending activity “reflects increased distribution pressure from an older investor population. This is not a sudden exodus of large investors, but rather a pattern of profit-taking typical of the end of a business cycle.”
Even if you want to isolate the most important transactions (such as those from whale wallets that are more than 7 years old and use more than 1,000 BTC per hour). Data does not indicate a break with the past. “These large spending events are not unique to this cycle, but have occurred during every major bull phase,” Glassnode said.
The main difference is in frequency, with spending events of more than 1,000 BTC by these whales “appearing more regularly and evenly, indicating a sustained, staggered distribution rather than sudden, coordinated ‘sells.'”
Bitcoin custody sales and sales amount
Ki Young Ju, CEO and founder of CryptoQuant, expressed optimism that “as long as capital inflows continue, Bitcoin will not enter a bear market.”
In the graph below, the realized capitalization line (purple) shows a strong and consistent trend over time of Bitcoin capital flows being maintained.
Despite selling pressure on LTH, Capital continues to flow into digital assets. Ki Yong-joo believes that “Bitcoin can always recover if the original whale stops selling and macroeconomic psychology changes.”
Analyst Willy Wu, on the other hand, questions the validity of the “long-term headline” metric reported by CriptoNoticias. For Wu, LTH supply metrics are “outdated” and misleading.
The analyst argues that the definition of the term is “a conceptual error; it is defined as a currency held in one direction for more than five months,” and concludes that “everyone is wary of misleadingly named diagrams.”
Wu suggests What is interpreted as a sale by a former investor may actually be a “custodial rotation” process. This includes moving your coins to a new storage structure, such as a more secure wallet or a corporate or treasury facility. “The decline in long-term supply reflects storage turnover, not sales. This phenomenon was much larger in 2017. In fact, this is a sign of a strong bull market,” Wu flatly stated.
