Bitcoin has experienced erratic price movements recently, exhibiting sharp fluctuations alongside hesitant recovery efforts. Currently, Bitcoin is trading around $87,900, having recently rebounded after a brief dip below the $86,247 support level. Despite this bounce, the momentum appears fragile, raising concerns about the sustainability of a broader price recovery.
A significant factor contributing to this uncertainty is the increasing selling activity among Bitcoin”s long-term holders. Recent on-chain data indicates that the supply of long-term holders has seen a 30-day change drop to a 20-month low, a situation reminiscent of the market conditions in April 2024. This decline points to heightened distribution pressure as these holders look to minimize exposure and preserve their remaining gains.
As these unrealized profits diminish, the trend of selling intensifies, motivated by a desire to prevent losses. Such behavior typically puts downward pressure on price recovery since it introduces more supply into the market without a corresponding increase in demand.
Macro indicators further illustrate the current landscape. The long-term holder net unrealized profit or loss (NUPL) metric has fallen to a monthly low, revealing that profits within this group are eroding. This decline suggests increased sensitivity to subsequent downward price movements. Historically, falling NUPL readings have led to defensive selling practices among long-term holders; however, if the metric continues to decrease, the selling pressure may eventually ease. At lower levels, long-term holders often halt their distribution, creating potential for Bitcoin”s price to stabilize and recover if demand improves.
At present, Bitcoin remains below the resistance level of $88,210. The recent recovery indicates that buyers are still active at lower price levels, although their confidence appears cautious. A potential short-term upward movement towards $90,308 is conceivable, yet resistance at that point may limit further gains.
As long-term holder selling persists, it is likely that Bitcoin will continue to consolidate around the $88,201 range while the market absorbs the increased supply. If long-term holders can adjust their selling behavior, the overhead pressure could diminish, paving the way for a breakout above $90,308 and potentially targeting $92,933. Such a scenario would challenge the current bearish outlook and signal renewed confidence among key market players.
