Uncovering the Truth Behind Bitcoin’s Long-Term Holders
There is a certain type of Bitcoin holder who only shows up when the noise gets loud. They are the people who watched 2021 merge into 2022, who still kept their keys, who learned to live with the idea that the line on the chart could fall faster than their mood. When the price rises, they are treated like prophets. When the price goes up, they are treated like villains.
In recent weeks, the rogue story has been all over the place, long-term holders are breaking up, the old hands are cashing out, and the vicious circle is coming to an end. The story makes emotional sense; It provides a clear reason for a chaotic market. However, on-chain analysts like Darkfrost have been watching the “LTH supply change,” essentially a way to track whether coins that have been standing still for months start moving.
The Impact of Coinbase’s Internal Wallet Migration
In late November, Coinbase moved large amounts of crypto between internal wallets as part of a planned migration. Coinbase said the transfers were planned, had nothing to do with a breach and were intended as a proven security measure to convert old internal wallets to new ones without impacting customer deposits or product availability. This is important because internal wallet migrations can look like real on-chain sales, coins are moved, ages are reset, dashboards light up and people start to draw conclusions.
It is movement without change of ownership. So when analysts say they have “corrected” long-term holder data by isolating the Coinbase effect, they are trying to remove a huge operational fingerprint from the chart. CryptoQuant founder Ki Young Ju highlighted the end of long-term selling pressure from holders on X, but can we be sure?
Interpreting the Long-Term Holder Signal
The most cautious conclusion from the adjusted charts floating around is simple: long-term holders appear to be loosening the sell button, and the shift is small. This is consistent with the broader idea that the market is trying to find a bottom, but confirmation of this is still sparse. Even Glassnode, which uses an entity-adjusted cohort model and defines long-term holders using the ~155-day threshold, describes long-term holders as “strong net allocators” with around 104,000 BTC per month in its Week On-Chain report Lacking Conviction at the end of October.
The Role of ETF Flows and Macroeconomic Background
In addition to on-chain behavior, there is now a second reality: ETFs have turned Bitcoin into something more like a daily sentiment ring for risk appetite. A single big ETF day can dwarf even a small change in the behavior of long-term holders, such as the outflow of around $523 million in one day from BlackRock’s iShares Bitcoin Trust (IBIT) in November.
Bitcoin’s biggest rallies tend to occur when liquidity increases and buyers feel comfortable taking risks. This is why the Federal Reserve keeps popping up in crypto conversations, even when no one wants it. In December, the Fed cut its target range by 25 basis points to 3.5% to 3.75%. Around the same time, the New York Fed announced that it would begin purchasing Treasury securities as part of its reserve management program.
Possible Paths Forward
There are three possible paths from here: a real reset, then a recovery; a wide, frustrating range; or sales returning and the market testing patience again. Long-term holder selling continues to decline; it stays that way for weeks, ETF flows stop bleeding and turn mixed positive, and volatility cools. Alternatively, long-term holders reduce sales but do not accumulate sustainably, ETFs remain choppy and macroeconomic headlines continue to shift market sentiment.
The Human Element
For the people who have endured multiple regimes, the most important change is rarely the one-day candle. It’s the moment when the urge to sell subsides and the urge to wait returns. If long-term holders actually withdraw from distribution, the market becomes a little less vulnerable. It doesn’t guarantee higher prices next week, it doesn’t protect anyone from a macro shock, and it doesn’t erase the power of ETF flows.
Read more about Bitcoin’s long-term holders and the current market trends at https://cryptoslate.com/bitcoin-long-term-holders-just-stopped-selling-but-a-broken-chart-signal-hides-the-truth/
