Bitcoin’s remarkable ascent above the $120,000 mark appears to have hit a snag, with the cryptocurrency reaching a peak of $124,157 before retreating slightly to $123,000. The real intrigue, however, lies in the forces behind this plateau. Blockchain data reveals that seasoned investors, or long-term holders, are cashing out, exerting downward pressure on the market.
Unveiling the Sellers
The spotlight is on older wallets. These digital vaults, dormant for over a decade, have suddenly sprung into action over the past four weeks. Their owners, seizing the opportunity for profit, are moving substantial amounts of Bitcoin on-chain. Gabriel Halm, a senior blockchain analyst at Sentora, notes, “It may be linked to concentrated selling pressure from long-term holders who have recently accelerated their selling.” This shift suggests a transformation in the market’s structure, with the accumulation phase during the second quarter’s pullback giving way to renewed selling.
Data from Bitcoin Magazine underscores this trend, indicating a decline of over 300,000 BTC held by long-term investors—defined as those holding coins for at least 155 days—within a mere month. This significant movement is a departure from the typically well-defined selling phases seen in previous Bitcoin cycles. For more on the factors driving Bitcoin’s recent highs, see our coverage of Bitcoin Hits $124K Record as 4 Tailwinds Align.
Market Dynamics and Expert Insights
While the activity from these dormant wallets has been significant, it has also been largely absorbed by the market, according to Sam Gaer, chief investment officer of Monarq Asset Management’s Directional Fund. He draws parallels to last year’s events when Germany’s Saxony state liquidated its holdings, pointing out that price levels in Bitcoin often consolidate around psychological thresholds, such as $100,000, $110,000, and $120,000.
“The persistent selling of higher strike calls by institutions may have influenced the rally’s speed,” Gaer explains. Institutions engage in this practice, known as call overwriting, to earn extra yield on top of their spot market holdings. This has culminated in a “volatility meltdown,” as Gaer describes it, with implied volatility—reflecting expected price swings—plummeting. “40 is the new 60,” Gaer quips, referring to the historical repricing of Bitcoin’s implied volatility as a sign of the market’s maturation. For insights on Bitcoin’s potential to reach new heights, refer to Bitcoin bulls charge at all-time highs as trader says $126K ‘pivotal’.
Looking Ahead
What does the future hold for Bitcoin? Despite the recent selling pressure, the path of least resistance seems to lean towards an upward trajectory. Analysts point to robust demand for Bitcoin, with 1.88 million addresses purchasing 1.3 million BTC at an average price of $118,000. This strong base of demand has so far mitigated any potential for a deeper pullback, according to Halm.
On the macroeconomic front, the market is increasingly coming to terms with a new normal where inflation rates exceed the Federal Reserve’s 2% target. This shift in expectations has fueled anticipation of a rate cut by the central bank in September, further bolstering Bitcoin’s prospects.
Steve Gregory, founder of Vtrader, anticipates a potential rotation of funds back into Bitcoin from Ether. With Bitcoin’s three-month volatility hitting its lowest since September 2023 and 95% of ETH wallets in profit, traders might find it logical to pivot back to the leading cryptocurrency.
In the coming months, the interplay of macroeconomic factors, investor behavior, and evolving market dynamics will continue to shape Bitcoin’s trajectory. While the recent surge has stalled, the undercurrents suggest that Bitcoin’s journey is far from over. The key question remains whether this selling phase is a temporary blip or a harbinger of a more profound shift in the cryptocurrency landscape. As always, in the world of crypto, expect the unexpected.
Source
This article is based on: Who Is Cashing Out of Bitcoin at Record Highs Above $120K?
Further Reading
Deepen your understanding with these related articles:
- Bitcoin Price Crash To $100,000 Or Rally To $122,000? Analyst Shows Game Plan For BTC
- Bitcoin Price Analysis: Is BTC About to Explode to $130K This Week?
- Bitcoin can liquidate $18B with 10% price gain as traders see $120K next
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.
