Bitcoin’s Long-Term Holders Start to Take Profit but Metrics Show Room for Growth
BTC Holders Take Profit | Credit: Derek Fenech
Key Takeaways
- Long-term Bitcoin holders (LTH) have started to sell.
- The LTH NUPL and MVRV indicators are not overbought.
- What can the LTH behavior tell us about the Bitcoin market cycle?
The Bitcoin (BTC) price reached a new all-time high on Nov. 6, moving above $75,000 for the first time. It continued this the next day, reaching a high of $76,990. This caused some Bitcoin long-term holders to take profit.
Since the actions of long-term holders can determine Bitcoin’s position in the market cycle, let’s analyze their behavior and see what lies ahead.
Long-Term Holders Sell
The long-term holder cohort is that which has held coins for over 155-days. The Long-Term Holder Net Position Change indicator measures the change in the supply of long-term holders in the past 30 days.
The indicator shows that long-term holders accumulated in August and September (green circle), near a price of $52,000 (green circle), and they started to take profit once the BTC price broke out above its all-time high (red circle).
The amount of selling of roughly 150,000 BTC daily is way lower than during the previous all-time high in April, when LTHs sold around 500,000 BTC.
Furthermore, the amount of LTH selling crossed 900,000 in the 2017 and 2021 market cycle highs (black circle). So, the indicator suggests that LTH behavior is unlike that near previous Bitcoin cycle highs, despite some profit-taking going on.
LTH Bitcoin Indicators
The Market-Value-to-Realized-Value (MVRV) and Net Unrealized Profit/Loss (NUPL) indicators can be divided into long- and short-term cohorts to isolate their respective movements. The LTH MVRV indicator, which takes into account the difference between the market and realized values is currently at 2.5.
The LTH MVRV indicator peaked at 20 and 12 in the previous cycles. It has only reached a high of 3.7 in this one. So, the indicator aligns with the LTH net position change, suggesting there is further room for growth.
Even if we use a descending resistance trend line that connects the two previous highs, the indicator has yet to reach it in the current cycle.
The NUPL indicator gives a similar reading. In both previous cycles, the indicator crossed into euphoria territory above 0.75 (blue). In the current cycle, the indicator reached a high of 0.72 and is currently at 0.63.
The movement is very similar to the consolidation before the all-time high in both 2016 and 2020 (green circles).
So, both the MRVR and NUPL indicators suggest that the Bitcoin cycle top has not hit its cycle top. A NUPL reading above 0.75, MVRV above 5, and consistent selling of long-term Bitcoin holders at an amount exceeding 500,000 per day would be a sign of a potential top.
More Room for Growth
Even though Bitcoin long-term holders have started to take profits, the amount is minuscule compared to that near the cycle top. Additionally, indicators such as the MVRV and NUPL indicate there is room for more upside.
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