Bitcoin: Long-term holders are cautious as profit-taking pressure builds

The Bitcoin [BTC] market has yet to show a decisive sign of recovery that would justify calling a bottom. Instead, new indicators are emerging that reinforce the possibility of further downside pressure.

One of those indicators comes from long-term holders (LTHs)—a group defined by wallets that have held Bitcoin for more than 155 days.

This cohort often reflects conviction capital, and shifts in their behavior tend to carry weight in market analysis.

Long-term holders’ historical threshold in focus

Historically, Bitcoin has formed market bottoms when its price falls below the cost basis of long-term holders. That historical relationship is once again under review.

Cost basis refers to the average purchase price of holders who have held the asset for more than 155 days. This typically trends upward over time as new investors mature into the long-term holder category at higher price levels.

According to data from CryptoQuant, the current LTH cost basis stands at $38,900, while Bitcoin traded at $64,890 at the time of writing.

If historical patterns repeat, Bitcoin could eventually retest this zone. On average, previous cycles have seen price decline roughly 20% below the LTH cost basis before staging a rebound that marked the cycle bottom.

However, history does not guarantee repetition. At present levels, Bitcoin remains approximately 66.8% above the long-term holders’ average cost basis.

That wide margin suggests that significant bearish catalysts would be required to force a move toward that threshold.

What are the catalysts?

Long-term holders are not necessarily positioning bullishly in the short term.

The Binary Coin Days Destroyed (Binary CDD), which tracks whether long-term investors are moving dormant coins, currently signals increased activity.

This indicator prints a value of 1 when long-term holders transfer their coins—behavior often associated with distribution or profit-taking.

Source: CryptoQuant

Market data shows that this is the first time since the 18th of February that the Binary CDD has printed a reading of 1. Before that, the last occurrence was on the 10th of February.

The recurrence suggests that a period of measured profit-taking may be underway among long-term participants.

So far, the price impact remains limited. Bitcoin recently rebounded from a weekly low of $62,510, reached on Tuesday after consecutive sessions of selling that began earlier in the week.

Long-term holders remain relatively measured

Despite the recent sell-off, data indicates that long-term holder profit-taking remains controlled and modest compared to activity from short-term holders (STHs).

Short-term holders—wallets that have held Bitcoin for fewer than 155 days—have accounted for a larger share of recent selling. Their distribution intensified during the later hours of the 23rd of January.

This dynamic becomes clearer when examining the LTH/STH Spent Output Profit Ratio (SOPR), which measures the profitability of coins spent by each cohort.

Source: CryptoQuant

When the LTH-to-STH SOPR ratio prints above 1, it indicates that long-term holders are leading profit-taking. A reading below 1 suggests that short-term holders dominate selling pressure.

Until the recent shift, long-term holders had been leading profit-taking, albeit moderately. The latest data shows short-term holders taking control of selling activity, pointing to relative restraint among long-term investors.

For now, there is no certainty that Bitcoin will revisit the long-term holders’ cost basis. Such a move would likely require a combination of macroeconomic headwinds, negative sentiment, and sustained selling pressure.

Absent those catalysts, the market may continue to consolidate above this historically significant threshold.

Final Summary

• Bitcoin’s historical short-term cost basis levels are drawing renewed attention as long-term holders move assets, potentially for sale.
• Profit-taking over the past day has remained dominated by short-term holders.