Bitcoin Long-Term Holders Reduce Exposure to Eight-Month Lows: What’s Next for BTC?
According to recent data from Glassnode, Bitcoin long-term holders (LTHs) have reduced their holdings to 14.3 million BTC in December, down from 14.8 million BTC in mid-July. This significant decrease has led to a drop in the percentage of supply held by LTHs to 71.92%, a level last seen in April. The reduction in LTH supply typically occurs during retail-driven phases and selling by LTHs that accompany cycle peaks, as observed in 2017 and 2021.
The decline in LTH supply can be attributed to various factors, including the current market sentiment and the potential for a deeper price correction. As of Monday, the LTH supply had decreased by 761,000 coins over the past 30 days, indicating that these investors are capitulating as fears of deeper price drops mount. The 30-day rolling LTH supply change, as reported by CryptoQuant, reveals a sharp decline in LTH supply, with a drop of 1.1 million BTC on Nov. 26, the second-largest on record.
Technical Analysis: Can BTC Price Avoid a Trip Below $70,000?
The technical structure of Bitcoin has weakened after losing support from the 50-week moving average (MA) and the yearly open at $93,300. The BTC/USD pair validated a bear flag when it dropped below the lower boundary of the flag at $92,000 on Friday. The first area of interest now lies between the $83,800 local low (reached on Dec. 1) and the multimonth low of $80,500, reached on Nov. 21. Losing this support zone would open the door for a deeper correction toward the measured target of the flag at $68,500, supported by the 200-week MA.
Analyst Nic commented on the situation, stating that “BTC broke down again, confirming the bearish flag,” and adding that the next “potential support” is the 100-week EMA at $85,500. The analyst also noted that key on-chain levels, such as $83.8K (ETF cost basis) and the $81.2K (true market mean), could provide support before the $80,000 level comes into play. The 20-day EMA has begun to turn down, and the RSI is in negative territory, indicating that bears are in control.
Conclusion and Future Outlook
The reduction in LTH supply and the current technical analysis suggest that Bitcoin’s price may be at risk of a deeper correction. However, it’s essential to consider the historical context and the potential for LTHs to increase their holdings, sparking a recovery to new all-time highs over the next few months. As the market continues to evolve, it’s crucial to stay informed and conduct thorough research before making any investment decisions. For more information and updates on the cryptocurrency market, visit the original source.
