There is a particular type of Bitcoin holder who only shows up when the noise gets loud.
They’re the people who watched 2021 melt into 2022, who kept their keys anyway, who learned to live with the idea that the line on the graph can fall faster than their mood. When the price rises, they are treated as prophets. When the price drops, they are treated like villains.
In recent weeks, the villain story has been everywhere, long-term holders are unraveling, veterans are cashing out, and the cycle is ending. The story makes emotional sense; gives a clear reason for a disorderly market.
The problem is that the chain rarely gives clear answers, especially when large custodians move funds.
On-chain analysts like Darkfrost have been watching the “LTH supply shift,” basically a way to track whether coins that have been sitting still for months are starting to move.
They see that the dump is coming to an end as we saw the first small green candle since mid-July. CryptoQuant founder Ki Young Ju highlighted the end of long-term selling pressure from holders on X, but can we be sure?
Data Spooked by Giant Coinbase Mix
In late November, Coinbase moved large amounts of cryptocurrency between internal wallets as part of a planned migration. Coinbase said the transfers were scheduled, not related to a breach, and were intended to rotate legacy internal wallets into new ones as a security best practice, with no impact on customer deposits or product uptime.
That’s important because internal wallet migrations can look like a real on-chain sale, coins move, age resets, dashboards light up, and people start drawing conclusions.
It is a movement without change of ownership.
So when analysts say they “fixed” long-term headline data by isolating the Coinbase effect, they are trying to remove a giant trading footprint from the chart.
What the Long-Term Headline Signal Says Right Now
The most careful conclusion from the tight charts circulating is simple: long-term holders appear to be loosening the sell button, and the change is small.
This aligns with the broader idea that the market is trying to find a bottom, but confirmation is still scarce. Even Glassnode, which uses an entity-adjusted cohort model and defines long-term holders using the ~155-day threshold, describes long-term holders as “heavy net distributors” of approximately 104,000 BTC per month as of the end of October, in its Week On-Chain, Lacking Conviction report.
The same report also makes the key point that traders forget in the midst of a crash: the big expansions in Bitcoin history have tended to begin after long-term holders move from distribution to sustained accumulation; It is a regime change that takes time to demonstrate its effectiveness.
Glassnode definition and methodology are also important here. Their documentation explains that the LTH, STH split is centered on 155 days and that the metric set is adjusted to the entity, rather than a raw address count.
So the best way to read the current “LTH stopped selling” narrative is as an early push, not a victory lap.
Even if long-term holders relax, ETF flows can still rock the week
There is now a second reality besides on-chain behavior: ETFs have turned Bitcoin into something closer to a daily mood ring for risk appetite.
A single big ETF day can also overshadow a modest change in long-term holder behavior, such as the outflow of approximately $523 million in one day from BlackRock’s iShares Bitcoin Trust (IBIT) in November.
These flows are not the same as a former holder selling coins, but they come to the same market, at the same time, in the same order book. That’s why Bitcoin can feel calm on-chain and still trade like a stressed-out tech stock.
The macro context is changing, but we are not yet in “easy mode”
Bitcoin’s biggest rallies tend to occur when liquidity increases and buyers feel safe taking risks. That’s why the Federal Reserve keeps coming up in cryptocurrency conversations, even when no one wants it to.
In December, the Federal Reserve reduced its target range by 25 basis points, to 3.5%-3.75%. Around the same time, the New York Federal Reserve announced that it would begin purchasing Treasury bills under its reserve management program, with a first program totaling about $40 billion and purchases beginning December 12.
Those are plumbing moves, helping explain why risk markets can stabilize even when sentiment is damaged, and why the coming months could depend on whether buyers pull back consistently.
Three paths from here, and what each would confirm.
- A true reboot, then a recovery.
Sales by long-term holders continue to disappear; stays that way for weeks, ETF flows stop bleeding and turn mixed to positive, and volatility cools. In that environment, Bitcoin often does what it does best: first bore people and then move on. - A wide and frustrating range.
Long-term holders reduce sales, but do not accumulate on a sustained basis. ETFs remain volatile and macroeconomic headlines continue to change the market mood. This is the result of Bitcoin spending more time rebuilding trust than breaking records. - Distribution returns and the market tests patience again.
If the distribution of long-term holders increases again and the ETFs experience another run of strong capital outflows, the price may remain under pressure. Glassnode’s Week On-chain view targets key base cost levels and highlights how overall supply can limit rallies when conviction is low, in Lacking Conviction.
The human part of the graph.
For people who have gone through multiple regimens, the biggest change is rarely the one-day candle. It is the moment when the desire to sell fades and the desire to wait returns.
If long-term holders actually move away from the distribution, the market becomes a little less fragile. It doesn’t guarantee higher prices next week, it doesn’t protect anyone from a macroeconomic shock, it doesn’t erase the power of ETF flows.
It makes something quieter.
It changes who is willing to be the marginal seller, and in Bitcoin, that’s how the next chapter begins.
