Bitcoin (BTC) has experienced a notable decline of 7.6% since nearly reaching the $100,000 mark on November 22. This drop represents the largest decrease since the rally sparked by Donald Trump’s U.S. presidential election win, which catapulted Bitcoin from around $66,000 to its all-time high.
Despite the pullback, the drop is not unusual for a bull market. In previous bull runs, Bitcoin has seen corrections of 20% to 30%, which help to clear out excess leverage in the market. The recent slide can largely be attributed to profit-taking by long-term holders (LTH), who have sold nearly 550,000 BTC, spurred by the price surge.
On November 21, Bitcoin saw a record-breaking $10.5 billion in profit-taking, marking the largest such event in its history, according to Glassnode data. This wave of selling has primarily come from long-term holders, defined by Glassnode as those who have held Bitcoin for over 155 days. These investors are often considered “smart money” due to their ability to buy during market downturns and sell during periods of euphoria, capitalizing on price surges.
From September to November 2024, long-term holders have sold 549,119 BTC, approximately 3.85% of their total holdings. This sell-off has outpaced purchases by institutional players like MicroStrategy (MSTR) and U.S.-listed spot ETFs.
Looking ahead, the key question is how long this selling pressure will persist. Historically, in previous bull markets (2017, 2021, and early 2024), the percentage drop from the peak has consistently become smaller. In 2017, Bitcoin saw a 25.3% drop, followed by a 13.4% drop in 2021 and a 6.51% dip earlier this year. The current drop stands at 3.85%. If this trend continues, it suggests that long-term holders could sell an additional 163,031 BTC, bringing their supply to around 13.54 million BTC.
This gradual reduction in selling pressure and the consistent pattern of higher lows and higher highs in long-term holders’ supply indicate that Bitcoin’s market dynamics are evolving, and the selling may eventually ease.
