Bitcoin LTH Distribution Not Over Yet – Can Institutions Absorb The Remaining Supply?

Bitcoin spiked to $107,000 on Sunday before swiftly retracing, shaking investor confidence and triggering fresh volatility across the market. The move, which many hoped would lead to a clean breakout into price discovery, instead reinforced the current consolidation range between $100K and $105K. Analysts remain divided — some see this as a healthy pause before a bigger push, while others warn of a deeper correction if BTC loses the $100K support.

As the market digests this pullback, on-chain data adds an important layer to the story. According to CryptoQuant, the supply held by Long-Term Holders (defined as wallets holding BTC for 18 months to 3 years) has dropped by over 2 million BTC since November 2023. This massive distribution wave suggests long-term participants have been gradually taking profits as prices climbed to new highs. While this doesn’t guarantee a crash, it does highlight the need for strong demand from new entrants, such as institutions, to absorb the selling pressure.

With price coiling above $100K and major resistance looming near ATH, the next decisive move could set the tone for Bitcoin’s trajectory heading into the summer.

Long-Term Holders Step Back As Bitcoin Fights For Momentum

Bitcoin is now at a make-or-break level, as bulls aim to defend the crucial $100,000 support zone. Following Sunday’s failed breakout at $107,000, the price has pulled back into familiar territory, frustrating investors who anticipated a move into price discovery. While some see this as a normal consolidation before the next leg up, others fear a deeper retrace may be underway if BTC loses the $100K floor.

The market faces clear resistance between $105K and the all-time high near $109K — a liquidity zone that could trigger aggressive buying if broken. However, the recent rejection suggests sellers still hold influence at higher levels, and short-term volatility could increase as the tug-of-war between bulls and bears intensifies.

Adding to this uncertainty is long-term holder behavior. Analyst Axel Adler revealed that since November 2023, wallets holding BTC between 18 months and 3 years have offloaded over 2 million BTC — roughly $138 billion worth. This massive distribution wave likely fueled much of the recent rally, but it also raises concerns. Adler notes that this cohort still holds about 500,000 BTC that could be sold later this year, potentially adding pressure during moments of weakness.

While institutional demand might absorb some of this future supply, with the corporate sector showing renewed interest, the broader market must remain cautious. As price consolidates, investor sentiment hangs in the balance. Whether bulls reclaim higher levels or a deeper correction unfolds will depend on how Bitcoin responds to the current stress test at $100K.

Price Action Details: Bulls Attempt To Reclaim Momentum

Bitcoin is showing signs of renewed strength as it trades at $105,389, attempting to break above recent resistance near the $106K–$107K zone. This level has capped previous rallies, and reclaiming it would signal a bullish continuation toward all-time highs. The price has successfully defended the $100K psychological support, which now acts as a strong demand zone, reinforced by the 200-day SMA currently around $92,994 and the 200-day EMA near $88,664.

Volume appears to be tapering off slightly compared to the surge earlier this month, suggesting some hesitation among bulls. However, the structure remains intact: a strong breakout from April lows has created a steep and well-defined uptrend. The consolidation just below resistance could form a bullish flag if the $107K ceiling is broken with strong volume.

A failed attempt to hold above $103,600 could invite another retest of the $100K support, where bulls must hold the line to prevent deeper retracements. On the upside, clearing $107K opens the path to $109K and into price discovery. This week’s close will be critical — a strong candle above $106K could set the tone for the next macro leg higher.

Featured image from Dall-E, chart from TradingView