Long-term holders of Bitcoin (BTC) are continuing to decrease their exposure, resulting in the lowest holdings since April.
Key takeaways:
Long-term holders have reduced their supply to 72%, the lowest since April.
The BTC price may face a deeper correction towards $68,500 if critical support levels are compromised.
Long-term holder supply of Bitcoin drops to April levels
Entities that have held Bitcoin for no less than 155 days have decreased their holdings to 14.3 million BTC in December, down from 14.8 million BTC in mid-July, according to data from Glassnode.
This has led to a supply percentage held by these investors dropping to 71.92%, a figure unseen since April, as indicated in the chart below.
Related: Bitcoin sharks are accumulating at the fastest rate in 13 years, with BTC down 30%
The April numbers were recorded as Bitcoin fell from its all-time high of $109,000 reached on Jan. 20, finding a bottom at $74,000. Long-term holders took advantage of the low prices, increasing their aggregate supply to 76% in July, which contributed to a 65% price rally, peaking at $123,000 on July 14.
If a similar pattern occurs again, these holders might use the recent drop in BTC price to $84,000 as a buying opportunity, potentially leading to a recovery towards new all-time highs in the coming months.
In the larger context, supply from long-term holders usually experiences significant declines during phases driven by retail activity and selling from long-term holders at the peak of market cycles, as observed in 2017 and 2021.
Reviewing the changes in long-term holder supply, data from CryptoQuant illustrates that on a rolling 30-day basis, supply dropped by 1.1 million BTC on Nov. 26, marking the second-largest drop recorded.
As of Dec. 15, the long-term holder supply had decreased by 761,000 coins over the preceding 30 days, indicating these investors are capitulating as anxiety over further price declines increases.
According to Cointelegraph, whales have sold $2.78 billion in BTC over the last month, maintaining downward pressure on the price.
Will BTC price stay above $70,000?
The technical framework for Bitcoin has weakened after falling below support from the 50-week moving average (MA) and the yearly opening level at $93,300.
The chart below highlights that the BTC/USD pair confirmed a bearish flag by dropping below the flag’s lower boundary at $92,000 on Dec. 12.
The first significant area of concern currently lies between the local low of $83,800 (reached on Dec. 1) and the multi-month low of $80,500 recorded on Nov. 21.
Failure to maintain this support zone may lead to a deeper correction toward the measured target of the flag at $68,500, backed by the 200-week MA. This scenario would represent a 20% drawdown from the present price.
“BTC has broken down again, confirming the bearish flag,” stated analyst Nic in an X post on Tuesday, noting that the next “potential support” lies at the 100-week EMA at $85,500.
“If we break that, there are crucial on-chain levels like $83.8K (ETF cost basis) and $81.2K (true market mean),” before $80,000 enters the picture, the analyst added.
As Cointelegraph pointed out, the 20-day EMA has started to trend downward, and the RSI is indicating negative territory, suggesting that bears are currently in control.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
