Bitcoin’s Market Sentiment Takes A Turn As Long-Term Holders End Distribution Phase

The broader crypto market continues to experience heightened volatility, causing a robust sharp drop in Bitcoin’s price below the $85,000 mark after witnessing a slight upward push in the previous week. With BTC’s price undergoing strong bearish pressure, investors’ sentiment has taken a drastic turn, which might influence the flagship asset’s next trajectory in the near future.

Long-Term BTC Holders Halt Massive Distribution Phase

As Bitcoin struggles to reclaim key levels, a notable trend has been identified among investors, particularly long-term BTC holders. Seasoned on-chain and macro researcher Axel Adler Jr. spotted the change in sentiment among investors in his recent data research.

Specifically, long-term Bitcoin holders appear to have completed their distribution phase, possibly setting the stage for renewed bullish momentum. This completion of the distribution phase suggests that selling pressure among long-term holders has subsided, limiting BTC’s supply in the market.

According to the macro researcher, the distribution by long-term holders is the largest in recent years. After navigating key metrics, Axel Adler highlighted that activity metrics have shifted from high to low, particularly from selling and accumulation.

The decrease in supply is usually a sign of a new market cycle and stabilization, representing a potential positive indication of the market. Furthermore,  if the demand for BTC surges, the development might lead to a supply squeeze in the upcoming weeks.

In another X (formerly Twitter) post, the expert reported that long-term holders have distributed over 1.715 million BTC from the $60,000 price level. After navigating the 30-day Net Position Change of Long-Term Bitcoin Holders, Axel Adler identified the massive distribution by the long-term investors. 

With the heightened distribution phase coming to an end, the metric has almost returned to neutral levels, suggesting that large-scale selling pressure has stopped. Should this trend continue, the possibility of BTC witnessing a rebound increases as long-term holders return to the accumulation phase.

A Stop In Bitcoin’s Selling Pressure On Crypto Exchanges 

Despite persistent bearish performance in BTC’s price, investors and traders are becoming bullish about the asset’s prospects, leading to a reduction in selling pressure. Axel Adler revealed that active selling by long-term holders reached its end on crypto exchanges.

Following the halt in selling activity on exchanges is the monthly Moving Average inflow, which has declined from 3.8% to about 1.4%. Since it lessens the downward pressure on Bitcoin, this minimal level of long-term holders’ selling activity is an encouraging sign for prices.

At the time of writing, BTC was trading at $81,995, with a more than 5% drop in the last 24 hours. Investors seem to be capitalizing on the recent sharp decline as its trading volume has increased by over 24% in the past day.