Bitcoin’s recent explosive price action has resulted in a significant surge in profit-taking among long-term holders (LTHs).
According to a review by Glassnode, the LTHs have realized $2.02 billion in daily profits, eclipsing the figure recorded in March 2024 and marking a new all-time high (ATH).
Long-Term Holders Ramp Up Distributions
The blockchain intelligence platform’s report shows long-term BTC holders distributed 507,000 coins since September, representing a substantial release of previously dormant supply.
While the amount is lower than the 934,000 BTC sold when the cryptocurrency rallied earlier in the year, it still represents a more aggressive approach. On average, 0.27% of the total LTH supply is being distributed daily, a level surpassed only 177 times in Bitcoin’s entire trading history.
Glassnode believes this activity is critical for price discovery, as it is reintroducing large volumes of supply into liquid circulation. In the past, such periods of heightened profit-taking coincided with strong inflow demands, a key component for maintaining upward momentum.
A closer examination of the distribution patterns revealed that coins held for six months to one year are behind most of the sell-side pressure. This cohort accounts for at least 35% of total realized profits, which comes to about $12.6 billion.
Per Glassnode’s analysis, the coins were mostly picked in 2023, and they reflect a swing-trade approach by investors who took advantage of the impetus that followed the launch of spot Bitcoin exchange-traded funds (ETFs) in January.
Conversely, those who have held their coins for longer than a year have been more conservative in their spending, suggesting that more seasoned heads remain optimistic about BTC’s long-term prospects.
Supply “Air Gap” Below $88K Raises Correction Concerns
Bitcoin’s recent run took it to within touching distance of the $100,000 mark. It peaked at $99,645 before dumping more than $6,000 as short-term holders (STHs) took profit.
Currently, it is changing hands at just over $96,000, with Glassnode data highlighting a potential risk zone below $88,000, where minimal trading occurred during the last rally.
Glassnode says this so-called “air gap” in supply distribution could signal a vulnerable price area, especially if demand weakens or profit-taking increases.
Given BTC’s historical price discovery process involving cycles of upswings, corrections, and consolidations, the experts suggest that a lack of substantial trading volume in the $88,000 range may necessitate a pullback to establish stronger support before the coin can confidently break through $100,000.
Additionally, they suggested that for the cryptocurrency to have a sustainable climb, the market needs to absorb the ongoing sell-side pressure. However, given the jump in realized profits by LTHs, a supply overhang exists in the market despite strong demand, something Glassnode feels may weigh on prices in the short term.
