According to Van Straten, Bitcoin’s Long-Term Holders May Have 163K BTC Left to Sell, Based on Historical Trends.

Bitcoin (BTC) has seen a significant drop of 7.6% after coming close to hitting the key psychological barrier of $100,000 on November 22. This marks the largest decline since the rally triggered by Donald Trump’s U.S. presidential election victory, which drove Bitcoin’s price from around $66,000 to its record high.

However, this price retreat is not out of the ordinary. In previous bull markets, Bitcoin has experienced corrections of 20% to 30%, which are considered natural market pullbacks that help eliminate excess leverage and prevent overheating.

The main driver behind Bitcoin’s inability to reach $100,000 appears to be a wave of profit-taking, particularly by long-term holders (LTH). According to Glassnode data, November 21 saw the largest profit-taking day in Bitcoin’s history, with a record $10.5 billion in sales.

Long-term holders, defined by Glassnode as those who have held Bitcoin for more than 155 days, are seen as “smart money” due to their ability to buy during market dips and sell when prices surge. From September to November 2024, these holders have sold 549,119 BTC, or roughly 3.85% of their total holdings. This selling activity has outpaced purchases from institutional players such as MicroStrategy (MSTR) and U.S.-listed spot ETFs.

Looking at previous cycles, historical patterns suggest that the percentage drop in price during bull markets is shrinking. In 2017, the drop was 25.3%, in 2021 it was 13.4%, and earlier this year, it was 6.51%. Currently, the drop stands at 3.85%. If this trend continues, it could imply that long-term holders might sell an additional 163,031 BTC, which would bring their supply to around 13.54 million BTC.

This consistent pattern of smaller corrections and higher lows in long-term holders’ supply suggests that while the selling pressure may continue for a short time, it could soon taper off, paving the way for more stability in the market.