As Bitcoin (BTC) reaches unprecedented heights, hitting $123,218 on Binance on July 13, on-chain analysis indicates a change in holder dynamics that might pose a risk to the cryptocurrency’s upward trend.
Bitcoin Holder Transition Could Impact Rally
In a recent CryptoQuant Quicktake article by contributor IT Tech, it is noted that long-term Bitcoin holders (LTH) — those who have possessed BTC for more than 155 days — have begun net distribution, signaling that experienced investors are cashing in on their profits.
Conversely, short-term holders (STH) — investors holding BTC for less than 155 days — have shifted to a net positive stance, suggesting they are investing in BTC’s ongoing surge with hopes of further price increases.
Historical patterns show similar LTH and STH behaviors in April 2021 and November 2023, during which BTC experienced a period of stabilization or a local peak as spot demand diminished.
IT Tech advises monitoring exchange inflows and funding rates for further confirmation. A surge in BTC transfers to crypto exchanges could indicate rising sell pressure, potentially undermining the digital asset’s bullish path.
Supporting this analysis, CryptoQuant contributor Arab Chain observed an increase in BTC transfers to exchanges from wallets containing 1,000 to 10,000 BTC, a movement typically linked to “whales.”
For those unfamiliar, the Spent Output Value Ranges (SOVR) indicator tracks on-chain BTC transfers by value range to identify active investor segments, providing insights into whether retail, mid-sized, or institutional players are driving market movements.
This observation is consistent with IT Tech’s findings on long-term holders. If selling pressure grows, BTC might correct to a support level around $111,800.
Varied Analyst Perspectives on Rally Continuation
Despite the distribution phase among long-term Bitcoin holders and increased whale deposits on crypto exchanges suggesting a possible rally conclusion, opinions differ among analysts.
For example, the STH Market Value to Realized Value (MVRV) indicates BTC might still be undervalued, pointing to the possibility of further gains. If this holds true, Bitcoin could reach as high as $150,000 before a major correction occurs.
Moreover, a recent $2 billion liquidity boost to major crypto derivatives platforms could potentially restore bullish momentum, though caution is advised.
The Bitcoin NVT Golden Cross is on the rise, signaling potential market overheating. As of the latest update, BTC is valued at $118,754, marking a 0.4% increase over the past 24 hours.
