Bitcoin’s long-term holders are moving coins again. For the third time this cycle, they’re distributing BTC back into the market. And honestly, it might just set the tone for where things go from here.
Are We Seeing a Repeat of 2021?
Back in the 2021 cycle, long-term investors started offloading their coins between late 2020 and early spring of 2021. They reduced their holdings by over 13% just before Bitcoin hit what some argue was its real peak in April—not the later one in November. Michael Nadeau from The DeFi Report has been pointing this out.
Those coins shifted to short-term holders, adding liquidity. But then something interesting happened: long-term holders started buying back in. By the end of the year, they actually held more than they started with. That second peak in November? It didn’t have the same energy. Not as much new money came in.
Now, a similar pattern seems to be playing out. According to Nadeau’s recent analysis, long-term holders reduced their supply by about 12.4% earlier this year—probably around Q1. Since then, they’ve been accumulating again. Sounds familiar, right?
But here’s where it gets tricky. Short-term holder activity is still pretty low this time. There isn’t much evidence of new capital flowing in. That could mean any future rallies might not have the same strength. We might be looking at another two-top cycle, shaped more by holder behavior than by fresh investment.
Underneath the Surface: Not Everything’s Strong
Data from Glassnode seems to back this up. Even though things look like they’re recovering, the market might be more fragile than it appears. If new demand doesn’t show up, Bitcoin could be in a vulnerable spot.
Spot market momentum is pushing the RSI into overbought territory, but volumes are flat. That lack of conviction suggests sellers are still there, waiting. Futures markets are active—open interest is up, and there are buy-side flows—but funding rates are softer. People might be getting cautious.
Options tell a similar story. Open interest is climbing, but volatility spreads are narrowing. There’s less hedging, more complacency. That usually means if volatility spikes again, the reaction could be sharp.
Mixed Signals from the Blockchain
On-chain metrics are… messy. The number of active BTC addresses is nearing cycle lows, even though transfer volumes are up. So money might be moving, but not necessarily more people. Fees are down, which points to lower demand for block space—not a great sign for speculative interest.
Most investors are in profit now, which is good. But profit-taking is increasing. That might hint that demand could be thinning out. Nothing drastic, but it’s something to watch.
All in all, the market feels like it’s at a crossroads. Holder behavior is echoing past cycles, but without new money, the path upward might be a narrow one.
