Long-Term Bitcoin (BTC) Holders Cashing out Amid Growing Cycle Peak Signs

Key Takeaways

• Bitcoin’s Long-Term Holders (LTH) are distributing heavily.
• The LTH supply is bigger than the short-term holder (STH) one.
• How much time is left in the current Bitcoin market cycle?

Bitcoin fell over 16% after its all-time high price of $109,356 on Jan. 20, 2025, triggering an even sharper downturn in the altcoin market. This intensified fears that Bitcoin may have reached a market cycle top.

On-chain indicators relating to long- and short-term holders show that the former is in a distribution phase. By analyzing LTH and STH market activity, it is possible to gain insight into what lies ahead for Bitcoin in 2025.

Long-Term Holder Behavior

Bitcoin’s Long-Term Holder Behavior Analysis indicator can provide insights into when the market cycle will end. Periods, when spending and Market Value to Realized Value (MVRV) are high (green), have previously marked the top of Bitcoin’s cycle. This was the case in all three previous market cycles.

The indicator usually enters the green territory twice and stays there for several months. The second time it exits its profitable territory marks the beginning of a long-term downward trend.

The indicator has been green for roughly three months in the current cycle. This is longer than the 2013-2024 and 2021-2022 highs but shorter than the 2017-2018 period.

However, although LTHs are taking profits en masse, their margin is much smaller than in the previous cycle. LTH’s start taking profits once their margin crosses 350%.

This has historically continued until the price increased another fourfold. The BTC price is barely above the 350% profit margin in the current cycle.

The LTH and STH supply thresholds are another indicator that illustrates the extent of LTH selling. The indicator shows that LTHs have begun distributing heavily since September 2024, transferring their supply to STHs.

Currently, they hold 13 million BTC, while STHs hold 4 million.

In the 2017 cycle, the STH supply crossed the LTH one (black circle). This happened in the 2021 high but to a much smaller degree (white circle).

So, while the cross has not happened in the current cycle, the convergence of the two lines is a sign of a top-forming Bitcoin market cycle.

Realized Cap HODL Wave

The Realized Cap HODL Wave is an on-chain indicator that helps visualize the age of BTC transactions. Similarly to the previous indicators, a market cycle forms when LTHs do not participate in market activity.

Historically, a cycle top occurs when bands below 3 months account for over 70% of market activity. This top has been declining in each market cycle.

While this level has not been reached yet, the massive decline in the 2-3 years band is a telling sign that the market cycle is ending.

This means those who bought Bitcoin between February 2022 and 2023, throughout the bear market, have now fully exited the market.

Historically, this HODL Wave band distributed throughout the entire bull market (black circle) and then completely exited at the top.

Currently, it holds 5% of the total supply, still a bigger value than the roughly 2% in the previous cycles.

While this could mean that there is more room to grow for Bitcoin, the market cycle is nearing its end.

LTH Distribution Signals Top

Several on-chain Bitcoin indicators suggest the Bitcoin market cycle is ending. LTHs are distributed on a scale that previously signified the Bitcoin market cycle tops.

While Bitcoin may still have a few weeks left to increase, the extent of the distribution makes it unlikely that the bull market will last long.