Analysis of Bitcoin HODLers Behavior and Potential Market Trends

Bitcoin HODLers Finish Taking Profits, Analyst Says Bear Market Near

Bitcoin HODLers appear to have finished taking profits from their long-dormant coins after an early-year rally pushed them far into the green, according to a popular crypto market analyst.

In a recent post, TXMCtrades said that the market has “likely absorbed the majority of the Long-Term Holder supply we will see activated in this run.” The behavior of long-term Bitcoin holders has been closely watched as they play a significant role in the market dynamics.

“As in every cycle, old supply came to life at the highs to pay itself for years of enduring risk,” TXMC explained. The total coin supply held by long-term holders steadily climbed between July 2022 and January 2024, but this pattern changed after the launch of U.S. Bitcoin spot ETFs.

Since then, long-term holders have sold 1.2 million BTC, with a significant portion coming from the Grayscale Bitcoin Trust (GBTC). The Bitcoin ETF is mostly comprised of long-term BTC holders with a lower cost base, unlike newer competitors.

Historical data shows that long-term holder supply has steadily increased throughout Bitcoin’s history, with exceptions during rapid price ascents. Analysts like TXMC and James Check are divided on whether the market is headed towards a bear market or if there is still room for growth.

Both analysts have warned that a bear market could officially begin if Bitcoin descends beneath $58,000 again, causing short-term holders to panic sell. The market remains volatile as investors closely monitor the behavior of long-term holders and the overall market sentiment.