Bitcoin Faces Strong Bearish Pressure as Long-Term Holders Halt Distribution

The broader cryptocurrency market is currently experiencing heightened volatility, leading to a sharp drop in Bitcoin’s price below $85,000. This downward movement comes after a brief upward push in the previous week, demonstrating the asset’s sensitivity to market fluctuations. As Bitcoin continues to struggle with bearish momentum, investor sentiment has taken a drastic turn, influencing BTC’s potential trajectory in the coming weeks.

Long-Term Bitcoin Holders End Massive Distribution Phase

As Bitcoin struggles to reclaim key resistance levels, a significant shift has been identified in investor behavior, particularly among long-term BTC holders. On-chain and macro researcher Axel Adler Jr. recently highlighted this shift in sentiment in his latest market analysis.

A notable finding from Adler’s research suggests that long-term Bitcoin holders have completed their distribution phase, which could pave the way for renewed bullish momentum. This means that the period of heavy selling pressure from long-term holders is coming to an end, effectively limiting BTC’s supply in the market.

According to Adler, the scale of this distribution is among the largest in recent years. After analyzing key activity metrics, he found that market behavior has transitioned from aggressive selling to a more neutral state, signaling a potential market stabilization phase.

Implications of Decreasing Bitcoin Supply

The decline in Bitcoin’s active supply typically marks the beginning of a new market cycle. As long-term holders reduce selling pressure, it reduces the available supply of BTC, which could lead to a supply squeeze if demand for the asset increases in the coming weeks.

In another post on X (formerly Twitter), Adler reported that long-term holders have distributed over 1.715 million BTC since Bitcoin was trading at $60,000. After analyzing the 30-day Net Position Change of Long-Term Bitcoin Holders, he confirmed that large-scale investors have significantly reduced selling pressure.

With the distribution phase nearing completion, this metric has now almost returned to neutral levels, indicating that BTC selling pressure has subsided. If this trend continues, Bitcoin could experience a strong price rebound, as long-term holders return to an accumulation phase rather than selling.

Bitcoin Selling Pressure Declines on Crypto Exchanges

Despite Bitcoin’s persistent bearish trend, traders and investors are showing renewed optimism about the asset’s long-term potential. This bullish outlook has resulted in a noticeable decline in selling pressure across cryptocurrency exchanges.

Axel Adler pointed out that active selling by long-term holders on exchanges has reached its end. He also noted that the monthly Moving Average inflow has dropped from 3.8% to 1.4%, further confirming the reduction in selling activity.

Since fewer long-term holders are selling their BTC, the downward pressure on Bitcoin prices has weakened, providing a positive signal for a potential recovery.

Bitcoin Market Performance & Trading Volume Surge

At the time of writing, Bitcoin is trading at $81,995, reflecting a more than 5% drop in the last 24 hours. However, despite the price decline, trading volume has surged by over 24%, suggesting that investors are capitalizing on the dip and preparing for a potential rebound.

What’s Next for Bitcoin?

Given that long-term Bitcoin holders have halted their large-scale distributions, the market may soon transition into a new accumulation phase. If demand increases while supply remains low, BTC could experience a bullish breakout in the coming weeks.

However, key resistance levels must be closely monitored. If Bitcoin fails to maintain its support near $80,000, the market may see further downside pressure. On the other hand, a sustained recovery above $85,000 could confirm a reversal and push BTC back toward new highs.

For now, investors should closely watch on-chain trends, institutional inflows, and macroeconomic factors that could influence Bitcoin’s next major price move.