The truth behind the long-term Bitcoin holder sell-off: Is this a cycle reset or a trend continuation?

【CoinPush】Recently, I came across an interesting on-chain data analysis. The analyst pointed out that long-term Bitcoin holders (LTH) experienced the most aggressive sell-off phase on record in 2025. At first glance, it seems quite alarming, but a closer look at the data suggests that the pressure is actually easing, which might be paving the way for the next rally.

Data speaks: Nearly $300 billion worth of Bitcoin that had been dormant for over a year flowed back into the market last year. During the 30 days from November 15 to December 14, the most intense long-term holder sell-off period in over five years occurred — with a monthly distribution of up to 1.14 million BTC, setting a record.

Interestingly, this large-scale sell-off didn’t happen out of nowhere. Since 2019, whenever long-term holder supply sharply declines, it usually indicates one of two things: either the rally has already weakened, or the market is undergoing a structural shift. Prices started weakening in October last year, but the major sell-off happened in November — this sequence is crucial, indicating that this isn’t an orderly profit-taking by investors, but rather a market crash response, marking a cycle reset rather than a trend continuation.

Now, the situation has changed. Since December, LTH supply has stabilized at around 13.6 million BTC. Prices have also entered a sideways range, suggesting the market is brewing something. More indicative is the long-term/short-term holder supply ratio — this indicator has dropped to -0.53. Historical data shows that whenever this ratio falls to -0.5 or below, Bitcoin either enters a bottoming phase or rebounds to new highs within a few weeks. After this signal appeared in December last year, price volatility narrowed, momentum stalled, which fully aligns with the characteristics of a cycle reset.

Following this logic, the consolidation from the first to the second quarter of this year might be a bottoming phase. A sustained rally is more likely to occur afterward, possibly even pointing to the third quarter. This isn’t a guarantee, but the signals from on-chain data are still worth paying attention to.