Several prominent crypto analysts are sounding the alarm bells over an unusual spike in long-term Bitcoin holder activity. According to CryptoCon, there has been a significant increase in the amount of old coins being spent and transferred, suggesting that investors who have been holding Bitcoin for an extended period are starting to sell.
This behavior is being tracked using the “coin days destroyed” metric, which takes into account the number of coins being moved as well as how long they had been dormant prior to the transfer. A high coin days destroyed value indicates that a substantial amount of BTC is being sold by longer-term holders.
Historically, this type of long-term holder sell-off has coincided with cyclical market tops for Bitcoin. Analysts point to only a couple of instances where long-term holder selling of this magnitude did not mark a price ceiling – those were during the depths of the 2018 bear market and a brief consolidation period in 2019.
The implications are concerning for BTC’s near-term trajectory according to the analysts. While some speculate that this could be a precursor sell-off prior to new all-time highs being reached, others fear it may be an early signal that the current bull cycle is reaching an overheated peak from which a sizable correction is imminent.
Implications for Bitcoin’s Near-Term Trajectory
One crypto strategist, EGRAG CRYPTO, drawing parallels to 2017’s market cycle, is forecasting a 30-40% pullback for Bitcoin in the coming weeks or months before the uptrend can regain momentum. During the 2017 bull run, Bitcoin experienced several major corrections on the way to setting new record prices.
Not all analysts are convinced a deep retracement is unavoidable, however. Some are optimistic that Bitcoin continues grinding higher from current levels, allowing alternative cryptocurrencies like Ethereum, Solana and others to see parabolic price appreciation against Bitcoin in the process.
The next few weeks will likely be an important test for BTC. If the pioneer crypto can shake off this latest round of long-term holder profit-taking and push past stubborn resistance, it could embolden the market for another major leg up. But a rejection from these levels could leave Bitcoin vulnerable to a more protracted pullback.
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