As Bitcoin (BTC) rose to $100,000 this year due to the aftereffects of Donald Trump’s victory in the US presidential elections, it caught the attention of the crypto market, which is seen in how traders, specifically whales, tried to cash in on it. The price later consolidated below the $100,000 mark after hitting the $108,000 mark last week. This has resulted in analysts taking a deeper dive into the on-chain metrics to understand who has made the most Bitcoin gains out of this, which has revealed interesting patterns of market sentiment and investors’ behaviour.
On-chain Analysis Reveals Seller Profiles
According to data from CryptoQuant, investors who entered the market six to twelve months ago – coinciding with the initial spot Bitcoin ETF anticipation – have emerged as the primary sellers during the recent price surge.
"The Binary CDD indicator shows a decline in the selling of older Bitcoin in December compared to November. This suggests that many long-term holders may anticipate even higher prices before selling," noted CryptoQuant analyst Yonsei Dent.
Long-term Holder Behavior and Historical Patterns
The resilience of long-term holders, who have maintained their positions despite significant profit opportunities, mirrors similar behavior observed during previous bull markets. Historical data shows that investors who have held Bitcoin for more than a year typically await substantial price appreciation before considering major portfolio adjustments.
Exchange Reserves Hit New Lows
A particularly compelling signal comes from Binance's Bitcoin reserves, which have reached their lowest levels since January 2024. CryptoQuant analyst Darkfost points out that a similar decline in exchange reserves preceded a 90% surge in Bitcoin's price earlier in the year. This trend of declining exchange reserves often indicates reduced selling pressure and growing confidence in Bitcoin's long-term prospects.
Institutional Impact and ETF Influence
Adding context to the current market dynamics, the approval and launch of spot Bitcoin ETFs in January 2024 has fundamentally altered the institutional investment landscape. These investment vehicles have accumulated over 200,000 BTC since their inception, representing more than $19 billion in assets under management at current prices.
Supply Metrics and Technical Analysis
Market data from Glassnode reveals that the percentage of Bitcoin supply that hasn't moved in over two years has reached 70%, highlighting the growing conviction among long-term investors despite price volatility. This metric has historically corresponded with the latter stages of accumulation periods before significant price movements.
Katie Stockton, founder of Fairlead Strategies, comments on the technical outlook: "Bitcoin's consolidation between $90,000 and $100,000 represents a healthy pause after the recent rally. The decreased selling pressure from long-term holders suggests strong hands are maintaining their positions, which typically precedes continuation of the uptrend."
Future Catalysts and Market Outlook
The upcoming Bitcoin halving event, expected in April 2024, adds another layer of anticipation to the market. Previous halvings have historically preceded substantial price appreciation due to the reduction in new Bitcoin supply entering the market.
As of press time, Bitcoin trades at $95,567, down 2.7% over the past 24 hours. While short-term volatility persists, the combination of declining exchange reserves, strong holder behavior, and institutional adoption through ETFs presents a potentially bullish outlook for Bitcoin's medium-term prospects.
However, market participants should note that breaking through the $100,000 resistance level will require sustained buying pressure and positive market sentiment. The current consolidation phase may extend as the market digests recent gains and establishes a new equilibrium between supply and demand.