Bitcoin Top Here? What Historical HODLer Selloff Pattern Says

On-chain data shows that long-term Bitcoin holders are selling. Here’s whether or not the current level of selling is enough to reach the top of the price.

Long-term Bitcoin holders have been selling large amounts recently

In a new post on X, analyst Ali Martinez discussed the historical trend in long-term holder holdings compared to the Bitcoin peak. “Long-term holders” (LTHs) refer to BTC investors who have held their coins for more than 155 days.

LTHs represent one of the two main segments of the BTC market based on holding time, while the other group is known as Short Term Holders (STHs).

Historically, the latter group has proven to contain the weak hands in the market, while the former consists of HODLers who barely react to spikes and crashes in price.

As such, selling from STHs is usually not significant, but it is possible that it is from LTHs, as it is not a particularly common event. One way to track the behavior of diamond hands is by net changing their position.

Net Position Change is an on-chain metric that measures the total amount of Bitcoin entering or exiting the LTH pool. Below is a chart of the indicator shared by the analyst that shows the trend in its value over the history of the cryptocurrency.

Change net position of Bitcoin LTH

As shown in the chart above, Bitcoin LTH’s net position change has seen a sharp decline into negative territory in recent weeks, meaning that the net supply amount has left the pool.

This is not the first time this year that the index has shown this trend, as something similar was also observed during the first quarter of this year. In the chart, Martinez highlights this and other older examples of this trend.

It seems that the large sell-off of LTHs has generally coincided with some kind of top in the cryptocurrency. “Interestingly, in 2017 and 2021, the biggest sell-offs occurred just before the final phase of the upside,” the analyst notes.

Thus, if the current bull market were to show something similar, it is likely that the current LTH sell-off is actually just the beginning of that final leg higher that will lead to a cyclical top for Bitcoin.

The indicator is also not currently as negative as it was during the biggest uptrend red rallies of 2017 and 2021, which could be another indicator that the top has not yet been reached. However, it remains to be seen whether the same pattern will be repeated this time as well.

Bitcoin price

Bitcoin is back in all-time high (ATH) discovery mode as its price just hit a new record above the $107,000 barrier.

Bitcoin price chart

Source: https://www.newsbtc.com/bitcoin-news/bitcoin-top-historical-hodler-selloff-pattern-says/

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