Glassnode: First Touch of $100k Failed, Who Was Selling BTC?

Original Title: Touching Distance

Original Author: UkuriaOC, CryptoVizArt, Glassnode

Original Translation: Baishui, Golden Finance

Abstract

· As the price of Bitcoin surged to $100,000, long-term holders started distributing over 507,000 BTC, although still lower than the 934,000 BTC sold during the March surge, it remains significant.

· Long-term holders have locked in a substantial amount of profits, setting their daily realized profit to a new ATH of 2.02B.

· When assessing the composition of entity spending, the majority of the selling pressure seems to come from tokens held between 6 months and 1 year.

Concentration of Long-Term Holders

After a series of continuous new ATHs, Bitcoin's price is now tantalizingly close to the impressive and long-awaited $100,000 mark. Just like in previous cycles, the group of long-term holders is taking advantage of liquidity inflows and demand-side strengthening, initiating a large-scale distribution of held supply.

Since the peak in LTH supply in September, this group has now offloaded 507,000 BTC. While this is a considerable scale, it is smaller compared to the 934,000 BTC during the ATH rebound in March 2024.

By evaluating the percentage of the total supply from profitable position trades by long-term holders, a similar situation is observed. Currently, an average of 0.27% of LTH supply is sold daily, with only 177 trading days showing higher sell-off rates.

Interestingly, we see that the relative rate of LTH spending is higher than during the ATH in March 2024, highlighting more active selling activity.

We can also refer to the LTH activity indicator to assess the balance between Coinday created (holding time) and Coinday destroyed (time spent holding). Typically, an upward trend in activity indicates an environment with increased spending activity, while a downward trend suggests that long-term holding is the primary driver.

While the current supply distribution rate is higher than the peak in March, the Coindays destroyed remains relatively low. This highlights that most LTH token transactions may have been recently acquired (e.g., the average is more likely 6 months rather than 5 years).

Profit Taking

Long-term holders play a critical role in the price discovery process, as they are the primary source of previously dormant supply returning to liquidity circulation. As the bull market progresses, assessing the profit-taking behavior of this group becomes more cautious, as with price increases, they tend to become more active.

Long-term holders are currently realizing a daily profit of up to $2.02B, setting a new ATH, surpassing the new ATH set in March. Strong demand is needed to fully absorb this oversupply, which may require a period of re-accumulation to fully digest.

Evaluating the balance between the profitability of LTH, we can see a rapid acceleration in the ratio between the two in November. By definition, this is due to a shortage of LTH supply during this price discovery mechanism.

Historically, assuming a significant and sustained influx of new demand, the price will remain optimistic over several months.

The Seller Risk Ratio assesses the total realized profit and loss locked relative to asset size (measured by realized cap). We can consider this metric within the following framework:

· High Value indicates investors are spending tokens with a substantial profit or loss relative to their cost basis. This scenario suggests the market may need to find a new equilibrium and typically experiences high volatility in price movement.

· Low Value indicates most tokens are spent close to their breakeven cost basis, signaling a degree of balance has been achieved. This situation usually means the "profit and loss" within the current price range has been exhausted and often describes a low volatility environment.

The Seller Risk Ratio is approaching the high-value range, indicating significant profit-taking is likely occurring within the current range. Nevertheless, the current reading is still significantly lower than the final value reached in the previous cycle. This suggests that even under similar relative selling pressure, the previous bull market had enough demand to absorb the supply.

Expenditure Composition

After identifying a significant increase in profit taking by long-term holders, we can increase the granularity of our assessment by carefully examining the composition of the supply sold.

We can utilize age segmentation of realized profit metrics to assess which subgroups contribute the most to selling pressure. Here, we calculate the cumulative realized settlement volume since November 2024.

· 6-month - 1-year realized profit: $12.6 billion

· 1-2 year realized profit: $7.2 billion

· 2-3 year realized profit: $4.8 billion

· 3-5 year realized profit: $6.3 billion

· 5 years and above realized profit: $4.8 billion

Tokens in the 6-month to 1-year timeframe dominate the current selling pressure, accounting for 35.3% of the total.

Tokens with a 6-month to 1-year timeframe dominate, highlighting that a majority of the expenditure comes from recently acquired tokens, underscoring that more long-term investors are still cautious and may be patiently waiting for higher prices. Some may argue that this selling pressure may describe investors with a volatile trading style who accumulated funds post-ETF launch and plan to capitalize on the next market wave.

Next, we can apply the same method to categorize all investor realized profits by size and classify them by locked-in investment return percentage.

· 0%-20% realized profit: $10.1 billion

· 20%-40% realized profit: $10.7 billion

· 40%-60% realized profit: $7.3 billion

· 60%-100% realized profit: $7.2 billion

· 100%-300% realized profit: $13.1 billion

· 300%+ realized profit: $10.7 billion

Interestingly, these groups exhibit a degree of consistency, with all groups representing a similar proportion of the total. It could be said that this represents an "unrealistic" strategy where investors with a lower cost basis achieve similar dollar profits by selling fewer tokens over time.

By focusing specifically on tokens purchased during 2021, 2022, and 2023, we can observe a significant and sustained expenditure behavior during the peak in March.

However, in the current uptrend, selling behavior is primarily coming from tokens acquired in 2023, while tokens purchased in 2021 and 2022 are just starting to add to their selling pressure. This is once again consistent with a possible explanation of profit-taking through a "swing trading" style being the dominant strategy.

Measuring Sustainability

To measure the sustainability of this upward trend, we can compare the current URPD structure with the structure experienced during the ATH in March 2024.

In March 2024, after months of appreciation following the ETF launch, supply from several clusters changed hands in the range of $40,000 to $73,000. Over the following seven months of price volatility, this region became one of the most significant supply clusters in history.

As supply reaccumulated, it formed the ultimate support from which this round of rebound began.

Fast forward to today, the market rebounded so quickly that very little BTC changed hands between $76,000 and $88,000. This leads to two key observations:

· Price discovery is often a process that requires rebounds, corrections, and consolidation to confirm a new price range.

· There is some form of an "air gap" below $88,000, and if the market retraces lower before attempting to break $100,000 again, this gap may become a focal area.

As the market attempts to rediscover equilibrium in this price discovery mechanism, changes in supply distribution can provide insights into areas of interest for supply and demand.

Summary

Despite the price surge, long-term holders are selling. This has led to an oversupply that needs to be absorbed to sustain the continuous price increase.

When assessing the composition of on-chain spending, most of the selling pressure seems to come from BTC held between 6 months and 1 year. This underscores the potential for further selling from seasoned entities that require higher prices to sell their BTC.

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