Bitcoin Long-Term Holders Are Gradually Reducing Their Balances, Now Holding 12.45 Million BTC—the Lowest Level Since July 2022

Historically, when long-term holder balances go down, Bitcoin prices are high.

Bitcoin’s long-term holders, defined as those who have held their BTC for over a year, are slowly reducing their balances. According to data from IntoTheBlock, as of Feb. 20, these holders now have 12.45 million BTC, which marks the lowest level since July 2022.

However, it's important to note that this drop in long-term holder balances is less severe compared to previous cycles. For instance, in this cycle, long-term holder balances are down by 9.8%. This compares to a 15% reduction in 2021 and a 26% dip in 2017.

Bitcoin long-term holders are gradually reducing their balances, now holding 12.45 million BTC—the lowest level since July 2022.

So far, this decline is less severe than in past cycles. Long-term holder balances have fallen by 9.8% this cycle, compared to 15% in 2021 and 26% in… pic.twitter.com/eA5Cckrgs4

Long-Term Holder Balances and Bitcoin Price

Historically, periods of declining long-term holder balances have coincided with higher Bitcoin prices. For example, in the 2018 market cycle, as Bitcoin's price dropped from a peak of nearly $20,000, the balances of long-term holders decreased from 9 million BTC to below 8 million BTC.

Similarly, during the 2021 bull market, as Bitcoin reached record highs of $60,000 to $65,000, these balances also declined.

However, these periods of decline in long-term holder balances are typically not sustained for extended durations. Once the market turns bearish, we often observe a reversal in this trend.

As Bitcoin’s price largely remained below $80,000 in 2024, long-term holders began buying again, and their balances increased to nearly 15 million BTC.

Read also: BTC Near $100K: Institutions Buy In, Yet Long-Term Holders Cash Out

Holder Behavior

It's also worth considering the behavior of different holder categories in bull and bear markets.

During bull markets, shorter-termホルダー (less than 1 month) and medium-term holders (1–12 months) tend to be highly active, aiming to capitalize on price increases and engaging in risk-seeking trades. This was evident in 2018, 2021, and the current 2024 surge.

In contrast, long-term holders (holding for over a year) usually remain stable, which highlights their strength during price fluctuations.

After periods of price corrections, such as those witnessed in late 2018 and mid-2022, the activity among shorter and medium-term holders tends to decline. This is when long-term holders begin accumulating again.

Exchange Flows Highlight Market Sentiment

Another interesting aspect to consider is the net flows on Bitcoin spot exchanges, which can provide further insight into market dynamics.

Throughout the period, high outflows (Bitcoin being withdrawn from exchanges) corresponded with price increases, especially during the rally toward $100,000 in November.

However, during periods of price corrections, such as in late November when Bitcoin dropped back to $60,000, we observed a significant increase in inflows. This aligns with increased selling pressure or traders taking profits during bearish phases.

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