Long-term Holders Begin Reducing BTC Exposure Amidst Record Net Inflows

Data from on-chain analytics firm Glassnode reveals that long-term holders (LTHs) have started reducing their Bitcoin (BTC) exposure. This trend may be a cause for concern, as LTHs are considered less speculative and more likely to hold onto their coins in the long term.

Long-Term Holders Up BTC Sales Through November

According to Glassnode’s data, LTHs accumulated significant profits throughout most of the past six months. However, they have now flipped to net sellers. This shift may be attributed to investors taking profit after a nearly $100,000 price upside.

**Glassnode Data Shows Largest Comparative 30-Day Reduction Since April**

Net position decrease among LTH entities reached 245,000 BTC on Nov. 20 compared to the previous 30 days.

Institutional Buying Pressure May Be Necessary for Price Breakout

Responding to this trend, crypto analyst Miles Deutscher emphasized that only large-scale buying pressure could effectively counter the selling activity of long-term holders. Top of the list are the United States spot Bitcoin exchange-traded funds (ETFs), which have seen record net inflows over the past month.

US Spot Bitcoin ETF Netflows: A Potential Solution

**Miles Deutscher Warns of Sell Pressure**

"If ETF flows must remain strong, or else long-term holder sell pressure may catch up to the market."

The ETF industry has indeed seen significant growth in recent times. The launch of options trading this week further boosted net inflows. Data from UK-based investment firm Farside Investors confirmed that Nov. 20 saw net inflows of over $770 million.

**Farside Investors Confirms Record Net Inflows**

Net inflows reached a total of $770 million on Nov. 20, according to Farside Investors.

Bitcoin Hodlers Sit on ‘Significant’ Unrealized Profits

Glassnode acknowledged that Bitcoin holders of all kinds are now firmly in the black, with supply dynamics apt to change as a result.

**Market Value to Realized Value (MVRV) Metric Signals Statistically Significant Unrealized Profits**

Bitcoin's price has recently broken above the +1σ band, located at $89.5k.

The market value to realized value (MVRV) metric measures almost as much as at Bitcoin’s old $73,800 peak in March. This signals that investors are now holding statistically significant unrealized profits and suggests an increased likelihood of profit-taking activities.

Overheated Metrics Often Characterize Crypto Bull Markets

Glassnode added that crypto bull markets often see long phases of ‘overheated’ metrics. Nevertheless, the market has historically remained in this overheated state for extended periods of time, especially when supported by sufficiently large capital inflows to absorb sell-side pressure.

**Historical Trends Indicate Prolonged Bull Markets**

Long phases of 'overheated' metrics are often characteristic of crypto bull markets.

Conclusion

This article highlights the importance of institutional buying in maintaining a price breakout. The trend of long-term holders reducing their BTC exposure and selling pressure is a pressing concern that may be mitigated by large-scale buying activity.

**Investors Should Conduct Their Own Research**

Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Explore more articles like this:

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