Bitcoin’s prolonged slide is testing the resolve of some of its most committed investors, with long-term holders selling billions of dollars worth of the cryptocurrency as prices move towards fresh cycle lows.
Compass Point analyst Ed Engel said investors who had held bitcoin for at least 155 days were largely inactive between February and April but have since started reducing their exposure. Over two days, the group sold about $2.4 billion worth of bitcoin, “which has large implications on BTC’s supply/demand balances,” Engel said.
The change is being closely watched because long-term holders are often viewed as a stabilising force during market downturns. Engel also noted that 26% of bitcoin sold over the past month came from investors who bought the cryptocurrency above $90,000.
“This cohort of top-buyers had been resilient throughout the bear market; however, they’re finally capitulating as BTC approaches new cycle lows,” he added. “Top-buyer capitulation is a very common theme in late cycle bear markets. This makes us more confident that BTC’s bear market is in late stages.”
Bitcoin has struggled to recover from its October record of more than $126,000, while uncertainty linked to the Iran war has added to risk aversion. Its weakness has stood out as stock markets continue to reach new highs, renewing debate over whether bitcoin behaves more like a haven asset or a speculative technology investment.
Spot bitcoin ETFs recorded their 12th consecutive day of net outflows on Tuesday, the longest streak since their launch, according to SoSoValue. Their combined assets fell to $85 billion from $107.8 billion on 14 May.
Bitcoin is down 10% so far this week after Monday’s sell-off triggered a wave of long liquidations. Strategy’s sale of 32 coins also attracted attention, although analysts said the transaction was too small to explain the wider decline.
“ETF flows are the primary driver of BTC price appreciation, explaining approximately 45% of weekly return variation, and the best vehicle for tracking investor adoption/appetite,” Citi analyst Alex Saunders said.