The cryptocurrency world has been buzzing over the recent surge of Bitcoin sell-offs, particularly among long-term holders (LTHs). However, findings from a prominent researcher indicate that these spikes may not paint the full picture.
In a recent analysis, the head of research at CryptoQuant, Julio Moreno, explored the apparent surge in Bitcoin LTH selling and concluded that it may have been inflated by internal transfers within cryptocurrency exchanges. For context, long-term holders are defined as those who have kept their Bitcoin for over 155 days, a group typically characterized by their reluctance to sell.
Despite this, there are instances when these so-called ‘diamond hands’ opt to liquidate their assets. Notably, November saw a significant sell-off, where the 30-day cumulative expenditure from LTHs surged to a staggering 1.55 million BTC, as illustrated in Moreno’s shared data.
However, Moreno cautioned that this figure can be misleading. Many of the transactions classified under LTH distributions included internal wallet movements that do not reflect genuine sell activities. As he explained, “A significant portion of LTH spending was due to exchange internal transactions.” Therefore, the dynamics of the market may be skewed.
CryptoQuant’s analysis revealed that approximately 650,000 of the reported LTH selling derived from internal wallet transfers at Coinbase. This revelation implies that the actual distribution from long-term holders did not reach record-breaking levels. Such patterns have been encountered previously; for instance, a noticeable spike in Coinbase’s internal transfers of LTH-aged coins was recorded back in December 2018.
Even with the scaling down of the sell-off numbers due to these internal transfers, the figures remain substantial. The LTH spendings still reached a noteworthy 900,000 BTC at their peak last November. This monthly total is noteworthy, as it ranks as the fifth most significant sell-off on record. Comparatively, the only instance in the current cycle that surpassed this figure occurred in December 2024.
Historically, the record for the highest volume of Bitcoin LTH selling remains with August 2017, a period that saw 1.4 million BTC transacted by long-term holders.
As of now, Bitcoin’s price hovers around $93,800, reflecting a nearly 7% gain over the past week. The market is closely monitoring further developments, particularly in the realm of holder behavior as it could significantly impact Bitcoin’s trajectory moving forward.
