The Bitcoin (BTC) “diamond hand” is not acting as if BTC price action has reached an all-time high of $73,800.
A new study conducted on May 28 by on-chain analytics firm Glassnode found that selling pressure on older coins is only half of previous bull market highs.
Bitcoin Investors Hold Off on Taking Profit
Long-term Bitcoin holders (LTHs) continue to resist the urge to take profits even as BTC price hovers near $70,000.
Despite earning an average of 3.5x returns, LTH wallets are not selling BTC at a rate that makes the current bull market unsustainable.
“As prices rise in response to new buy-side pressure, the importance of the opposite side, namely sell-side pressure from long-term holders, also increases at the same time,” Glassnode explains in the latest edition of its weekly newsletter, The Week. “On chain.”
“We can therefore evaluate the unrealized profits of the LTH cohort as a measure of sales incentives, and the realized profits as a measure of actual sell-side valuation.”
LTH refers to wallets that hold inbound BTC for more than 155 days and reflects the less speculative side of the Bitcoin investor spectrum.
Glassnode used the Realized Value (MVRV) metric to show that LTH will soon enter historically high levels of unrealized profits.
“Historically, the transition phase between bear and bull markets sees LTH trading above 1.5 and below 3.5 and can last for a year or two.”
“If the market upward trend continues and new ATH is formed in the process, unrealized profits held by LTH will expand. “This will lead to a certain amount of sales-side pressure that will substantially increase the incentive to sell and eventually gradually exhaust the demand side.”
LTH selling pressure “has decreased noticeably”
However, considering the recent all-time highs in March, there is room for optimism if BTC price discovery returns.
Related: There Are ‘3 Reasons to Be Bullish’ for Bitcoin to Rise After Drop to $68,000 — Analysis
Even at the $73,800 peak, LTH was not as widely distributed in the market as at previous bull market explosion highs.
“During the last two bull markets, LTH net distribution rates ranged from 836,000 to 971,000 BTC per month,” the newsletter said.
“Current net selling pressure peaked at 519,000 BTC per month in late March, with approximately 20% of this coming from Grayscale ETF holders.”
Glassnode noted the ongoing sell-off by investors in Grayscale Bitcoin Trust (GBTC). GBTC is an institutional investment vehicle that lost voting position among spot Bitcoin ETFs by assets under management this week.
The report predicts that in the future, LTH will continue the investment trend that started again at the end of last year.
“With significant long-term investors distributing to the $73,000 ATH, sell-side pressure has eased noticeably,” he wrote in part of his conclusion.
“Long-term holders have begun redepositing their coins for the first time since December 2023.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.