Bitcoin’s recent exuberance hit a snag as the cryptocurrency pulled back from its new peak. On Monday, Bitcoin soared to a record $123,000 but has since retreated to just under $117,000. This 5% tumble comes as investors, particularly those who’ve held their positions for over five months, decided it was time to pocket profits from the weekend’s impressive rally.
Long-Term Holders Lead the Charge
According to data from Glassnode, a staggering $3.5 billion in profits were realized over a mere 24-hour span. The lion’s share of these gains—56%—ended up in the hands of long-term holders, defined as investors who acquired their Bitcoin more than 155 days ago. This massive sell-off marks one of the year’s largest profit-taking events, underscoring the volatility that often accompanies Bitcoin’s meteoric rises. As explored in Cathie Wood’s ARK: Bitcoin’s Bullish Momentum Slows as Long-Term Holder Stacks Hit Record, the behavior of long-term holders is a critical factor in understanding market dynamics.
Here’s the catch: the rapid price surge, which saw Bitcoin leap from $108,000 to $123,000, created a significant supply void. Glassnode’s UTXO Realized Price Distribution (URPD) provides insight into this phenomenon. It tracks unspent transaction outputs, essentially capturing the buying prices of Bitcoin that remain unsold. This data reveals that very few trades occurred within the $110,000 to $116,000 range, making the market susceptible to sudden and pronounced price shifts.
Unpacking the Data
The entity-adjusted version of the URPD data further clarifies this movement. By considering the average purchase price of each entity’s entire balance and excluding internal transfers, which don’t reflect true market activities, the data presents a clearer picture of current market dynamics. It also omits supply held on exchanges to prevent skewing the data, given how exchanges aggregate user funds.
With minimal Bitcoin supply residing between the $110,000 and $116,000 price points, the market remains on edge. “The lack of trading activity in this narrow range means we could see rapid price fluctuations,” noted crypto analyst Sophia Lin. “It’s almost as if the market is teetering on a knife’s edge.”
A Historical Perspective
Bitcoin’s recent movements aren’t entirely unprecedented. Historically, the cryptocurrency has demonstrated a pattern of sharp rallies followed by swift corrections. This time, however, the speed of the ascent—and the subsequent sell-off—seems particularly striking. As Bitcoin’s price surged, many long-term holders saw a lucrative opportunity to cash in, reducing their risk exposure in what remains a highly volatile market. This trend aligns with observations in Most Bitcoin Holders Are Selling—But One Cohort Is Aggressively Buying, highlighting contrasting strategies among different investor groups.
The present landscape raises questions about what lies ahead. With Bitcoin’s price oscillating and a notable supply gap, will the market stabilize, or are we on the brink of another roller-coaster ride? Many analysts believe the latter scenario is plausible, given the current data. “The market’s fragile balance could tip in either direction,” said Lin, “and investors should brace for potential turbulence.”
Looking Forward
While Bitcoin’s rally may have stalled for now, the broader implications for the cryptocurrency world remain significant. Investors, both seasoned and new, are watching closely to determine their next moves. The ongoing profit realization by long-term holders could signal a shift in market sentiment, encouraging more cautious trading strategies in the months ahead.
In the background, the cryptocurrency remains a topic of fervent debate. Can Bitcoin sustain its upward trajectory, or will further corrections dampen investor enthusiasm? Only time will tell, but for now, the market’s unpredictability is a reminder of Bitcoin’s mercurial nature. As we move deeper into 2025, the crypto community will be watching—and waiting—with bated breath.
Source
This article is based on: Bitcoin Rally Stalls as Long-Term Holders Cash Out
Further Reading
Deepen your understanding with these related articles:
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
