Long-term Bitcoin (BTC) holders continued to cut back their BTC exposure as their holdings fell to their lowest levels since April.
Key Takeaways:
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Long-term Bitcoin holders reduced their supply to 72%, the bottom level since April
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There is a risk of a deeper correction in BTC price to $68,500 if key support levels fail.
The supply of long-term Bitcoin holders falls to April levels
According to data from Glassnode, long-term holders (LTHs), entities which have held Bitcoin for at the very least 155 days, reduced their holdings to 14.3 million BTC in December from 14.8 million BTC in mid-July.
This has brought the share of supply held by these investors all the way down to 71.92%, a level last seen in April, as shown within the chart below.
The April numbers got here as Bitcoin fell from its all-time high of $109,000 on January 20 to a low of $74,000. Taking advantage of low prices, LTHs increased their supply to 76% in July, leading to a 65% increase in the value of Bitcoin to its record high of $123,000.
Should the same scenario occur, LTHs could see the recent BTC price drop to $84,000 as a chance so as to add to their holdings, which might trigger a rally to latest all-time highs over the following few months.
Supply of long-term Bitcoin holders, %. Source: Capriole Investments
In more detail, LTH supply typically declines sharply during retail-driven periods and LTH sales that coincide with cycle peaks, reminiscent of in 2017 and 2021.
Analyzing the LTH supply change, data from CryptoQuant shows that the availability fell by 1.1 million BTC on a rolling 30-day basis on November 26, the second largest on record.
As of Monday, LTH supply had declined by 761,000 coins over the past 30 days, suggesting that these investors are capitulating as fears of a deeper price drop grow.
Bitcoin 30-day rolling LTH supply change. Source: CryptoQuant
As Cointelegraph reported, whales have sold $2.78 billion value of BTC up to now 30 days, maintaining bearish pressure.
Can BTC price avoid a crash below $70,000?
Bitcoin's technical structure weakened after it lost support from the 50-week moving average (MA) and year-opening price at $93,300.
The chart below shows that the BTC/USD pair confirmed a bear flag because it fell below the flag's lower boundary at $92,000 on Friday.
The first area of interest is now between the local low of $83,800 (hit on December 1st) and the multi-month low of $80,500 hit on November twenty first.
Loss of this support zone would open the door for a deeper correction towards the flag's measured goal at $68,500, supported by the 200-week MA. Such a move would represent a 20% decline from the present price.
BTC/USD day by day chart. Source: Cointelegraph/TradingView
“BTC broke again and confirmed the bearish flag,” analyst Nic said in an X post on Tuesday, adding that the following “potential support” is the 100-week EMA at $85,500.
“If we break through that, there are key on-chain levels like $83.8K (ETF cost basis) and $81.2K (true market average),” before $80K comes into play, the analyst added.
As Cointelegraph reported, the 20-day EMA is beginning to decline and the RSI is in negative territory, suggesting that bears are on top of things.
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This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision. While we attempt to supply accurate and up-to-date information, Cointelegraph doesn’t guarantee the accuracy, completeness or reliability of the knowledge in this text. This article may contain forward-looking statements which might be subject to risks and uncertainties. Cointelegraph won’t be answerable for any loss or damage arising out of your reliance on this information.
