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Bitcoin Faces Pressure as Long-Term Holders Shift to Selling at $118K

Bitcoin’s recent record-setting rally has triggered a notable shift in investor behavior, with long-term holders (LTHs) now offloading their stash, marking a potential inflection point in the market.

On-chain data shows that LTHs, who typically hold Bitcoin for more than 155 days, have shed 52,000 BTC since the price reached its latest peak.

Long-Term Holders Mirror Previous Distribution Cycles

On July 29, analyst Axel Adler Jr. 突出显示 on X that LTH supply has dropped by 52,000 BTC at the $118,000 level, signaling a decisive shift from accumulation to distribution.

“The shift in balance from accumulation to distribution exactly repeats the LTH pattern from fall 2024 when the price rose from $65K to $100K,” Adler noted, suggesting that profit-taking could intensify as prices climb further.

This activity has also coincided with mounting pressure on short-term holders (STHs). According to recent analysis by CryptoQuant, wallets holding BTC for one to three months now sit on just 13% unrealized profits, down from 69% earlier in the cycle and a fraction of the 232% and 150% gains seen at the 2012 and 2021 peaks.

Adding to the complexity, Matrixport also warned of a potential “tactical pause” for Bitcoin as macro events, including the Federal Reserve’s rate decision and a White House report on digital assets, loom over the market.

Historically, August and September have been among Bitcoin’s weakest months, compounding the risk of a near-term pullback despite a broadly bullish outlook for the end of the year.

Price Action and Market Sentiment

At the time of this writing, BTC was trading at $118,979, up slightly by 0.6% in the last seven days and 10.8% over the past month. It has traded in a tight 24-hour range between $117,498 and $119,026, reflecting waning momentum after a strong mid-July pump. While the asset is still 71% higher year-over-year, it remains 3.2% below its all-time high, and the shift in holder behavior is starting to weigh on sentiment.

However, some market watchers remain unfazed. Rekt Capital, for instance, noted on July 28 that Bitcoin’s weekly close above $119,200 had formed a bullish “flag” breakout structure, potentially paving the way for further gains if the level is successfully retested as support.

Meanwhile, fellow analyst CrypNeuvo flagged a potential short-term dip toward $114,300 to fill a CME gap before any renewed push higher.

If history repeats, this distribution period could provide an entry point for strategic buyers. But with LTH selling accelerating and short-term profits thinning, BTC’s next move hinges on whether it can hold $118,000, or risk a sharper shakeout before its next leg up.

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