An analysis of on-chain data reveals a shift in the dynamics of Bitcoin profit-taking activities, with the current trend being driven by long-term holders who entered the market during the previous cycle, a departure from the patterns observed during the peaks in November and December.
Examining the Realized Profit of Bitcoin Long-Term Holders
Recent insights shared by on-chain analytics firm Glassnode shed light on the behavior of Bitcoin’s long-term holders (LTHs) and their Realized Profit trends. These LTHs are defined as investors who have held onto their BTC for more than 155 days, indicating a strong commitment to their positions.
While long-term holders are typically associated with a reluctance to sell, they do participate in profit-taking activities, particularly during significant market events such as rallies to new all-time highs. The data reflects a notable response from this group during the recent price surge, as illustrated by the 7-day moving average of the Realized Profit.
The concept of “Realized Profit” measures the profits realized by Bitcoin investors through transactions, calculated as the difference between selling price and cost basis. Notably, the recent profit-taking spree by long-term holders has consistently exceeded $1 billion per day in July, marking a significant period of profit realization.
Interestingly, the composition of long-term holders participating in the recent profit-taking phase differs from the scenario observed in late 2024. While the previous event was primarily driven by holders in the 6-month to 12-month age range, the current sell-off involves long-term holders in the 3-year to 5-year age bracket.
This age group comprises investors who entered the market between 2020 and 2022, indicating their involvement in the previous price cycle. The strength of the recent price surge appears to have enticed these more patient long-term holders to realize profits from their positions.
While the profit-taking activity has shown a slowdown this month, the market remains vigilant to determine whether long-term holders are done with their selling spree or if further movements are on the horizon.
Current Bitcoin Price
As of the latest update, Bitcoin is trading around $119,500, registering a gain of more than 4.5% over the past week.
