Bitcoin is currently experiencing heightened selling pressure as long-term holders exhibit signs of distress, contributing to an already fragile market structure. The cryptocurrency is trading more than 45% below its all-time high, suggesting that a correction which initially appeared healthy is evolving into a more profound adjustment cycle.
In recent months, volatility has predominantly been a concern for short-term traders, but new data indicates that even seasoned investors are no longer shielded from market downturns. One of the most telling indicators of this shift is the Long-Term Holder Spent Output Profit Ratio (LTH SOPR), which measures whether long-term holders are selling their assets at a profit or a loss.
This critical metric has now fallen below the level of 1, currently standing at 0.88. A SOPR below 1 indicates that, on average, long-term holders are selling at a loss—a phenomenon not witnessed since the end of the 2023 bear market. While the annual average remains relatively high at 1.87, the recent decline signals a notable behavioral change among these investors. Essentially, long-term holders are beginning to capitulate, opting to lock in losses rather than wait for a potential recovery.
Concurrently, on-chain data has revealed a significant increase in Bitcoin inflows from long-term holders to Binance. Recent data indicates that daily inflows have approximately doubled compared to the annual average, with multiple consecutive spikes showcasing unusually high activity. Such inflows are typically indicative of preparations to sell or actively adjust positions, given Binance”s deep liquidity.
This pattern of inflows has persisted since the previous all-time high, but it has intensified in recent weeks, suggesting that this is part of a larger trend among experienced holders rather than isolated profit-taking. The ownership landscape also provides further evidence of this shift, with retail investors having sold over 1.2 million BTC in the past two years—accounting for more than 6% of the circulating supply. As retail investors offload their holdings, institutional vehicles, including exchange-traded funds (ETFs) and public companies, have been absorbing a considerable portion of the supply.
This structural redistribution of Bitcoin ownership is reshaping market dynamics. With retail investors distributing their assets and institutions accumulating, the resulting volatility and liquidity flows are shifting. However, the recent uptick in exchange inflows suggests that the prevailing selling pressure has not yet fully abated.
The combination of a declining LTH SOPR and increased inflows to Binance paints a concerning picture for the market. When historically resilient holders begin to realize losses and simultaneously transfer assets to exchanges, it often precedes increased volatility. While this does not definitively predict further declines, it indicates that the correction is entering a more critical adjustment phase. If this trend continues, Bitcoin may face sustained pressure in the short to medium term, as the supply from experienced holders contributes to an already cautious market environment.
The insights shared in this article are intended for educational purposes only and should not be construed as financial or investment advice. Always conduct thorough research and consult with a licensed financial advisor before making investment decisions.
