Bitcoin has recently surged past the $70,000 mark, setting a new all-time high and injecting fresh confidence into the market. However, as prices climb, a critical question emerges: are the most experienced and successful Bitcoin holders—the long-term investors—beginning to sell? This article analyzes on-chain data to reveal the behavior of long-term holders and examines whether recent profit-taking is a cause for concern or simply a healthy part of Bitcoin’s market cycle.
Signs of Profit-Taking Are Emerging
The Spent Output Profit Ratio (SOPR) offers real-time insight into the realized profits across the Bitcoin network. In recent weeks, a clear upward trend in profit realization has been observed. Clusters of green bars on the chart indicate that a significant number of investors are selling Bitcoin to lock in gains, especially after the price rose from the $74,000–$75,000 range to new highs above $100,000.
Figure 1: The Spent Output Profit Ratio shows significant recent profit realization.
While this may raise short-term concerns about resistance levels, it's essential to view this activity within a broader on-chain context. Such behavior is not uncommon in bull markets and should not be taken alone as a signal of a cycle top.
Long-Term Holder Supply Continues to Grow
"Long-Term Holder Supply" refers to the total amount of Bitcoin held in wallets for more than 155 days. Despite the price surge, this metric has continued to climb. This trend does not necessarily indicate new buying activity but suggests that Bitcoin is "aging" into long-term holding status without being moved or sold.
Figure 2: Bitcoin Long-Term Holder Supply shows a clear increase.
In other words, many investors who bought in late 2024 or early 2025 are still holding their coins and are transitioning into long-term holders. This is a healthy dynamic typical of the early or middle stages of a bull market and does not yet show signs of large-scale distribution.
Analyzing HODL Waves
To delve deeper, we use HODL Waves data, which segments wallets by the age of their coins. Focusing on wallets holding coins for six months or longer, we find that over 70% of Bitcoin's supply is currently controlled by medium to long-term holders.
Figure 3: HODL Waves analysis shows medium to long-term investors hold the majority of Bitcoin.
Interestingly, although this proportion remains high, it has begun to decline slightly, indicating that some long-term holders may be selling, even as the overall long-term holder supply grows. The primary driver of long-term supply growth appears to be the gradual "aging" of short-term holders into the 155-day+ holding bracket, rather than large-scale new capital inflows.
Figure 4: The rate of change in long-term holder supply often moves inversely to Bitcoin’s price.
Using raw data provided by on-chain analytics platforms, we analyzed the rate of change in long-term holder balances segmented by wallet coin age. Historically, a significant downturn in this metric has often coincided with cycle tops. Conversely, a sharp rise in this metric typically corresponds with market bottoms and deep accumulation phases.
Short-Term Changes and Distribution Ratios
To refine these signals, data can be segmented more precisely by comparing "recent market entrants (0–1 month)" with "medium-term holders (1–5 years)." This coin age distribution contrast offers more frequent and real-time insights into distribution behavior.
Figure 5: Coin age distribution ratios provide valuable market insights.
We observe that a sharp decline in the ratio of 1–5 year holders relative to newcomers has often preceded market tops. Conversely, when this ratio rises rapidly—indicating more Bitcoin is moving into the hands of experienced investors—it has frequently been a precursor to significant price rallies.
Changes in long-term investor behavior are among the most effective ways to assess market sentiment and the sustainability of price movements. Historical data shows that long-term holders, by buying during periods of panic and holding through volatility, have often outperformed short-term traders. By analyzing Bitcoin’s age distribution structure, we can identify market tops and bottoms more accurately without relying solely on price action or short-term sentiment.
Frequently Asked Questions
What does "Long-Term Holder Supply" mean?
Long-Term Holder Supply refers to the total amount of Bitcoin that has been held in wallets for more than 155 days. This metric helps gauge the conviction of investors who are less likely to sell during short-term price fluctuations.
Is current profit-taking by investors a bad sign?
Not necessarily. Profit-taking is a normal and healthy part of any bull market. It indicates that investors are realizing gains, which can help stabilize the market by creating new entry points for other buyers.
How can HODL Waves data help predict market trends?
HODL Waves segment the market by how long coins have been held. Shifts in these segments can indicate whether investors are accumulating or distributing, providing clues about potential market tops or bottoms.
What is the significance of the Spent Output Profit Ratio (SOPR)?
SOPR measures the profit or loss of spent outputs. A high SOPR suggests that investors are realizing significant profits, which can sometimes indicate local tops, but must be analyzed in context with other metrics.
Are long-term holders still buying?
Current data suggests that long-term holder supply is still growing, primarily due to coins aging into that category rather than new large-scale purchases. However, some long-term holders may be taking partial profits.
How does institutional investment affect long-term holder behavior?
Institutional involvement often brings a longer-term perspective to the market, potentially increasing the stability of long-term holder supply and reducing panic selling during downturns.
Conclusion
At present, long-term holders are showing only minor signs of selling, far from the scale seen at previous cycle tops. While some profit-taking is occurring, its pace appears manageable and characteristic of a healthy market environment. Given the current bull phase and participation from both institutional and retail investors, the data suggests we are still in a structurally strong period. With new capital continuing to flow in, there remains potential for further price appreciation.
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