Bitcoin (BTC) Long-Term Holders Are Not Selling; Is This Bullish?

Long-term holders of Bitcoin (BTC), i.e., on-chain accounts that purchased BTC at least seven years ago, are not sending their holdings to exchanges yet.

Bitcoin (BTC) finally managed to stay strong above the $100,000 price mark for a day. This immense rally has sparked curiosity among traders on whether early BTC inflows to exchanges are linked to long-term holders cashing out their profits.

However, recent on-chain data analysis by a CryptoQuant community author suggests that this may not be the case. According to pseudonymous crypto researcher Crypto SunMoon, a featured CryptoQuant community author, long-term Bitcoin holders are not yet cashing out their holdings.

On-chain accounts that purchased BTC at least seven years ago are termed as long-term holders. Analysis of their behavior during the previous bull market reveals that they started selling their holdings right before the bullish phase ended.

“Holders who have held bitcoin for seven years or more sold some of their holdings before the end of the previous bull market.”

However, the latest data suggests that we are still far from that stage. The last major inflows to centralized exchanges driven by long-term holders were registered in late Q1, 2024. But, these inflows were not as significant as those that accompanied the previous BTC all-time high in November 2021.

“Long-term bitcoin holders are not sending their holdings to exchanges yet.”

Moreover, in some of the largest altcoins, a different story unfolds. Over 70% of both Ethereum (ETH) and Litecoin (LTC) owners have been holding their coins for at least 12 months.

Meanwhile, various groups of long-term holders are displaying confidence in the crypto rally, as the selling pressure predominantly comes from "paper hands."

USDT, USDC Metrics Favorable for Bitcoin Bulls

Bitcoin (BTC) inflows to exchanges may be weak, but major stablecoins, such as USDT and USDC, are telling a different tale.

Over the last three months, the USDT supply on centralized exchanges has surged by 40%, reaching an all-time high of over $43 billion. This massive accumulation of USDT on centralized exchanges suggests a continuous inflow of fiat currency, indicating strong demand for cryptocurrencies.

In the last three months, the total supply of stablecoins on centralized exchanges has also increased at an accelerated rate. According to CoinGecko data, the aggregated stablecoin supply has risen from $160 billion to $224 billion.

Despite USDT remaining the largest stablecoin, USDC has experienced the fastest growth in 2024. Together, the capitalization surges of both stablecoins are also being closely monitored as a sign of a prolonged bull market for Bitcoin (BTC) and major altcoins.