Bitcoin Profit-Taking Power Has Shifted: Last Cycle Buyers Now The Drivers

On-chain data shows the recent Bitcoin HODLer profit-taking spree is driven by buyers from the last cycle, unlike the November-December peaks.

Bitcoin Long-Term Holder Realized Profit Has Seen A Slowdown This Month

In a new post on X, on-chain analytics firm Glassnode has talked about the trend in the Realized Profit of the Bitcoin long-term holders. The long-term holders (LTHs) refer to the BTC investors who have been holding onto their coins for more than 155 days.

Statistically, the longer a holder keeps their coins dormant, the less likely they are to transfer or sell them in the future. As such, the LTHs with their long holding times represent the resolute side of the sector. That said, while it’s true that the cohort is made up of diamond hands, it doesn’t mean that its members never participate in selling at all. Major events like rallies to new all-time highs (ATHs) tend to be profit-taking opportunities too good for even the HODLers to miss out on.

Both the bull run toward the end of 2024 and the price push this year induced a significant reaction from this Bitcoin group, as the below chart for the 7-day moving average (MA) of the Realized Profit suggests.

The “Realized Profit” here is naturally an on-chain measure of the amount of profit being harvested by the Bitcoin investors, calculated as the difference between the selling price and cost basis of the tokens becoming involved in transactions. During July, the 7-day MA LTH Realized Profit consistently stayed above $1 billion every day, making the HODLer profit-taking spree one of the largest ever recorded.

Interestingly, there is a difference in the composition of LTH segments involved in this latest profit realization phase and the one from November-December. Back then, the event was led by holders in the 6-month to 12-month age range. That is, the LTHs who were newly promoted into the group.

A lot of these investors were the early buyers of the Bitcoin spot exchange-traded funds (ETFs), which began trading in the US near the start of 2024. In contrast, the latest selloff was made up of LTHs falling in the 3-year to 5-year age band.

This age band represents the Bitcoin buyers from 2020 to 2022. In other words, it’s made up of the investors who got in during the previous price cycle. As such, it would appear that the recent price push was strong enough to pull out some of the more patient LTHs.

The profit-taking push from the cohort has cooled off this month, though, leaving it to be seen whether their selloff is over or if there’s more to come.

BTC Price

At the time of writing, Bitcoin is floating around $119,500, up more than 4.5% over the last seven days.