After large-scale selling by long-term Bitcoin holders: on-chain data suggests a cycle reset, and the bottom may have formed

【Crypto Rhythm】Long-term Bitcoin holders (LTH) have experienced the most aggressive sell-off phase on record this year. On-chain data analyst Biraajmaan Tamuly pointed out that although this sell-off has previously triggered intense market volatility, recent data suggests that this pressure may be easing—potentially paving the way for the next upward cycle.

From on-chain indicators, the situation is indeed worth paying attention to. By 2025, the number of Bitcoin that has been dormant for at least two years has seen significant changes. Nearly $300 billion worth of Bitcoin that has been inactive for over a year is re-entering circulation. The most dramatic was from November 15 to December 14, a mere 30 days, which saw the most intense long-term holder sell-off period in over five years—November alone saw a peak of 1.14 million BTC in the 30-day distribution, a new historical high.

But here’s an interesting detail: prices started weakening in October, and the large-scale sell-off actually occurred later. The sequence is very important. Tamuly believes this indicates a “collapse-style sell-off” rather than an orderly profit-taking— in other words, this marks a cycle reset rather than a simple continuation of the previous trend. Since 2019, sharp reductions in long-term holder supply rarely occur in isolation; they usually appear when Bitcoin’s trend is already showing signs of fatigue, whether the rally is nearing exhaustion or during a structural transition.

A more critical signal comes from recent data. Since December, LTH supply has stopped decreasing and is currently maintained at around 13.6 million BTC, while Bitcoin’s price has entered a sideways range. The long-term/short-term holder supply ratio provides further evidence. Whenever this ratio drops to -0.5 or lower, Bitcoin either enters a bottoming phase or rebounds to new highs within a few weeks. In December last year, the ratio dropped to about -0.53, followed by narrowing price fluctuations and stagnating momentum. This behavior perfectly aligns with the characteristics of a cycle reset.

Following this logic, the consolidation from the first to the second quarter of this year may constitute a bottoming range, and any sustained upward movement is more likely to occur afterward, perhaps in the third quarter.