Bitcoin's most steadfast long-term holders continue to offload their holdings, with selling pressure now visibly impacting price action. Since hitting an all-time high above $126K over two months ago, Bitcoin has retreated nearly 30%, struggling to find support at current levels. On Wednesday, Bitcoin fell below the $86K threshold again, trading at $85,889.53.
A key factor behind Bitcoin's weakness is the persistent selling by long-term holders. Latest blockchain data shows Bitcoin held for years is re-entering circulation at rates rarely seen in recent years, while market absorption capacity weakens. According to K33 Research, Bitcoin untouched for at least two years has decreased by approximately 1.6 million coins since early 2023—worth about $140B at current prices. This trend signals sustained profit-taking by long-term investors. In 2025 alone, nearly $300B worth of dormant Bitcoin (held over one year) has re-entered circulation.
CryptoQuant notes that long-term holder selling over the past 30 days ranks among the highest levels in over five years. Chris Newhouse, Head of Research at decentralized finance firm Ergonia, describes the current market as undergoing "slow bleeding," characterized by persistent spot selling against thin buy-side liquidity. This spot-driven downtrend proves harder to reverse than rapid liquidations caused by excessive leverage.
While new Bitcoin ETFs and institutional demand previously absorbed such selling, recent conditions have shifted: ETF flows turned negative, derivatives volumes declined, and retail participation weakened significantly. The same supply now meets a market with fewer buyers and poorer liquidity.
Market stress became particularly pronounced after October 10, when unexpected comments from former U.S. President Trump about punitive tariffs triggered $19B in single-day liquidations—the largest leveraged flush in crypto history. Traders subsequently retreated from derivatives markets, with no meaningful recovery since.
Bitcoin briefly rebounded to $90K on Wednesday, which traders attributed to short-covering, but gains quickly faded. Prices then weakened again, testing the lower bound of October's crash range, with an intraday drop of 2.8% to $85,278.
K33 senior analyst Vetle Lunde observes that unlike previous cycles, this wave of long-term holder selling wasn't driven by altcoin trading or protocol incentives, but rather by deep liquidity from U.S. ETFs and corporate buyers enabling early investors to realize six-figure profits. This has significantly reduced Bitcoin's concentration of holdings. He notes that the reactivation of long-term holdings in 2025 and 2024 ranks as the second and third largest in Bitcoin's history, trailing only 2017.
Meanwhile, Coinglass data shows open interest in Bitcoin options and perpetual contracts remains well below pre-October crash levels, indicating many traders remain sidelined in a market where derivatives dominate trading volumes. Even the "basis trade"—popular among hedge funds for exploiting spot-futures spreads—has become unprofitable.
However, Lunde suggests long-term holder selling may be nearing exhaustion. Historical on-chain data shows roughly 20% of Bitcoin supply has been reactivated within two years—approaching a critical threshold. He projects that by 2026, concentrated selling by early investors should diminish noticeably as Bitcoin further integrates into institutional portfolios, potentially shifting market structure toward net buying dominance.
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