Bitcoin experienced intensified selling pressure this week, but on-chain data reveals that diverse buyer groups are actively absorbing the sell-side volume.
Key Market Dynamics Unfold
Recent price action shows Bitcoin consolidating between the $100,000 and $110,000 levels, primarily driven by profit-taking from medium and long-term holders. Data from Glassnode indicates that holders across multiple cohorts have been locking in substantial gains.
Holders who have possessed Bitcoin for three to five years realized profits of approximately $849 million. Meanwhile, the seven-to-ten-year cohort cashed out around $485 million in profits. Additionally, those holding BTC for one to two years secured roughly $445 million in gains.
The daily realized profit metric reached $2.46 billion, with its seven-day moving average climbing to $1.52 billion. This figure surpasses the year-to-date average of $1.14 billion but remains notably below the peak values of $4-$5 billion observed in the fourth quarter of 2024.
Underlying Strength Despite Selling Pressure
Despite the apparent selling from long-term holders, analysis presents a silver lining. CryptoQuant analyst Yonsei Dent suggests this activity could be net positive for the market. Key on-chain metrics support this perspective.
The Spent Output Age Bands (SOAB) indicator highlights which holding periods are spending their coins. To simplify this data, the Binary Coin Days Destroyed metric flags days when long-term holders move significant coin volumes. Dent explains that the persistent movement of older coins is actually a positive signal within a bull market cycle.
Crucially, Dent emphasizes that despite the notable selling pressure, Bitcoin's price has demonstrated remarkable stability. This price resilience indicates that the market is effectively absorbing the sell-offs due to sustained and stable demand from buyers.
The analyst also noted increased activity from the one-to-three-year holder cohort, reflecting profit-taking from buyers of the previous cycle. "If anything, this indicates a transition of market leadership from older holders to newer holders," Dent stated, implying that such a transition signifies underlying market strength rather than weakness.
Historical Trends Point to Bullish July Performance
Historical probability analysis suggests Bitcoin may be poised for a significant July rebound. This potential upswing could follow the decade-long trend of the S&P 500 posting positive July returns. The S&P 500 itself recorded its highest monthly close in history this June, creating favorable macroeconomic conditions.
Historically, July has been Bitcoin's strongest performing month. Since 2013, BTC has delivered an average return of 7.56% in July, with positive performance in eight out of twelve cycles. This includes a notable surge of 24.03% in July 2020.
The third quarter typically delivers strong returns for risk assets, and Bitcoin's correlation with the S&P 500 suggests that new all-time highs above $112,000 could materialize as early as this month.
Understanding Market Cycle Patterns
Once Bitcoin achieves new all-time highs, historical patterns suggest the cryptocurrency could exhibit significant volatility. Technical analyst CryptoCon has highlighted a 195-day sideways consolidation period since December 18, 2024, with only 36 days showing significant price movement.
This analysis points to an extended "fourth cycle range expansion" phase. Such prolonged cycles align with historical patterns where brief price breakouts mask broader upward trends.
Since 2023, each major Bitcoin breakout has unfolded within a 30-40 day window, typically followed by a period of consolidation. If history repeats, the next breakout could propel prices rapidly into the $140,000-$150,000 range before entering another cooling phase.
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Frequently Asked Questions
Why are long-term Bitcoin holders selling now?
Long-term holders are taking profits after significant price appreciation. This behavior is typical in bull markets and often indicates a healthy transition of assets from early investors to new market participants.
What does "market absorbing sell pressure" mean?
This phrase describes a situation where sufficient buying demand exists to purchase the coins being sold without causing significant price declines. It indicates underlying market strength and confidence.
How reliable are historical patterns for predicting Bitcoin price movements?
While historical patterns don't guarantee future results, they provide valuable context about market cycles and investor behavior. Many traders use these patterns alongside fundamental and technical analysis.
What is the significance of Bitcoin's correlation with the S&P 500?
A positive correlation suggests that Bitcoin sometimes moves in tandem with traditional risk assets. This relationship can indicate how macroeconomic factors might influence cryptocurrency markets.
How long do typical Bitcoin consolidation phases last?
Consolidation periods can vary significantly, but recent cycles have shown phases lasting several months before decisive breakouts occur. These periods allow the market to establish new support levels.
What happens after Bitcoin reaches new all-time highs?
Historically, new all-time highs are followed by both rapid price increases and increased volatility. The market often experiences pullbacks and consolidation before continuing its overall upward trajectory.
This analysis provides insight into current market dynamics but does not constitute investment advice. All investment and trading involves risk, and readers should conduct their own research before making decisions.