Bitcoin has seen wide-ranging fluctuations in 2022 as it dropped massively during this bear market. One aspect that has appreciated in significance lately is the sentiment of long-term holders. The selling pressure on LTHs has reduced as prices rallied throughout July above their average cost basis – $22.6k.
However, despite the lowering of financial constraints, LTHs continue to sell at net losses tucked in between 11% and 61% on average. Could this selling pressure fuel unwarranted FUD in market sentiment as it attempts recovery?
Gather the crowd
Despite uncertainties in the macro landscape, the crypto-market has been gradually recovering since early July. Bitcoin itself has overseen a steady growth over this period as it briefly touched the $24k-level. However, concerns are emerging after the most recent episode of selling pressure from the long-term holder cohort, as reported by Glassnode.
Right now, Bitcoin long-term holders are in possession of over 13.337 million BTCs, 79.85% of the total circulating supply. However, since the start of May, they have distributed around 222k BTC – Equivalent to approximately 1.6% of their all-time-high holdings.
Source: Glassnode
The LTH-cost basis was trading at $22.6k, at press time, meaning that on average the long-term holdings are at 4% profit. This, because BTC was trading just below $23.2k, at the time of writing. This would mean that the press time MVRV ratio represented profitability for these long-term holders.
Source: Glassnode
There has also been a significant change in the market sentiment of long-term holders over the past three weeks. Their aggregated behavior has changed from accumulating at a rate of 79 BTC/month to distributing up to 47k BTC/month.
As pointed out in the report,
“Remarkably, this cohort seized the opportunity of rallying prices and spent 41k BTC, or 0.3% of their supply, over the last 21 days. (Note that net spending is defined as Accumulation plus HODLing minus…
