BTC PROFIT EROSION: LONG-TERM HOLDERS HIT 20-MONTH SUPPLY LOW AS UNREALIZED GAINS CRASH

As 2025 draws to a close, Bitcoin is facing a critical challenge from its most influential cohort: long-term holders (LTHs). On-chain data reveals that LTH profits have crashed to a monthly low, triggering defensive selling behavior that has pushed the LTH supply change to a 20-month low. With unrealized gains evaporating, these high-conviction investors are increasingly sensitive to further downside, creating a significant overhead supply wall that Bitcoin must absorb before it can target new highs above the $90,000 mark. I. Defensive Distribution: Protecting Remaining Gains

The current price stagnation is largely a reflection of a shift in LTH strategy from accumulation to risk reduction: 20-Month Supply Low: The 30-day change in LTH supply has hit levels not seen since April 2024. This suggests that long-term investors—those who typically “HODL” through volatility—are currently offloading tokens to lock in remaining profits or minimize potential losses as the market softens.NUPL Crash: The Net Unrealized Profit/Loss (NUPL) metric for LTHs has dropped to a monthly low. Historically, a declining NUPL among this group triggers a feedback loop of defensive selling. However, analysts note that once this indicator reaches extreme lows, selling often pauses, allowing the price to establish a long-term floor. II. Price Levels: The $88,210 Line in the Sand

Bitcoin’s technical structure is currently locked in a delicate balance between active buyers and distributive sellers: Immediate Resistance ($88,210): Bitcoin is trading near $87,900, just below the crucial $88,210 level. Reclaiming this resistance is the first necessary step for a sustainable recovery.The $90k Hurdle: A short-term climb toward $90,308 is possible, but this zone is expected to act as a major cap on gains while LTH selling remains elevated.Invalidation Points: On the downside, the $86,247 support has recently been tested and held. A failure to maintain this level would likely expose Bitcoin to deeper corrections toward the mid-80s, further intensifying LTH profit-taking. III. Conclusion and Short-Term Outlook The short-term outlook for Bitcoin is one of fragile consolidation. The market is currently being weighed down by a significant 20-month low in LTH supply growth, signaling that “smart money” is in a defensive posture. For a true bullish trend to emerge, LTH distribution must slow down and be met by a fresh wave of institutional or retail demand. Traders should watch the $88,210 level closely; a confirmed daily close above it would signal that the market is starting to absorb the excess LTH supply, clearing the path for a retest of the $92,933 zone and invalidating the current bearish narrative. ⚠️ Important Disclaimer This analysis is for informational and educational purposes only and is based on analyst commentary, technical patterns, and on-chain metrics. It is not financial advice, nor should it be construed as a recommendation to buy, sell, or hold any security or cryptocurrency. The cryptocurrency market is highly speculative, volatile, and subject to external factors. Readers must conduct their own comprehensive research (DYOR) and consult with a qualified financial advisor before making any investment decisions.