Bitcoin Rally Pauses as Long-Term Holders Sell

Bitcoin Rally Pauses as Long-Term Holders Sell

Market Retreat Following Record High

Bitcoin experienced a notable pullback after reaching a record high of $123,000 on Monday, slipping below the $117,000 mark and marking a decline of approximately 5% from its peak. This retreat followed a weekend rally that had propelled the cryptocurrency to unprecedented levels. The recent downturn is largely attributed to profit-taking by investors, particularly long-term holders who have held their bitcoin for more than 155 days. Data from Glassnode reveals that investors collectively realized $3.5 billion in profits over the past 24 hours, with long-term holders responsible for 56% of these gains, highlighting their significant influence on the current selling pressure.

Supply Dynamics and Market Vulnerabilities

The rapid price surge from $108,000 to $123,000 created a notable supply gap, as trading activity was sparse in the $110,000 to $116,000 range. Glassnode’s UTXO Realized Price Distribution (URPD) data illustrates this phenomenon by tracking unspent transaction outputs and the prices at which bitcoin is held across the blockchain. The entity-adjusted URPD, which excludes internal transfers and exchange-held supply, offers a clearer view of genuine market holdings. The limited supply available between $110,000 and $116,000 leaves the market vulnerable to sharp price fluctuations in either direction.

This vulnerability is further exacerbated by emerging challenges. The pause in bitcoin’s rally coincides with increased selling from long-term holders, suggesting a potential shift in market sentiment. Additionally, elevated market leverage indicates a heightened risk appetite among traders, raising concerns about the sustainability of current price levels.

Demand Trends and Market Outlook

Despite ongoing inflows into bitcoin exchange-traded funds (ETFs), there are signs of weakening organic demand from broader market participants. While speculative activity has surged, helping to maintain bitcoin’s price just below its all-time high, the lack of robust demand outside ETF channels may signal a changing market dynamic. As bitcoin consolidates below its recent peak, market observers remain attentive to whether renewed buying interest will materialize or if further profit-taking and volatility will dominate the next phase of trading. The interaction between long-term holder behavior, leverage, and underlying demand is expected to play a critical role in shaping bitcoin’s near-term trajectory.