Bitcoin’s prolonged downturn is entering a more fragile phase as long-term holders begin to show visible signs of stress, adding new pressure to an already weakened market structure.
- Bitcoin is still over 45% below its all-time high.
- Long-term holders are now selling at a loss (LTH SOPR below 1).
- Inflows from LTHs to Binance are rising, signaling potential selling pressure.
- Retail continues to distribute while institutions absorb supply.
The asset is still trading more than 45% below its previous all-time high, and what initially looked like a healthy correction is increasingly resembling a deeper adjustment cycle. While short-term traders have borne much of the volatility in recent months, fresh data suggests that even seasoned investors are no longer immune.
Long-Term Holders Start Realizing Losses
One of the clearest warning signals comes from the Long-Term Holder Spent Output Profit Ratio (LTH SOPR), a metric that tracks whether long-term holders are selling at a profit or a loss. Historically, this group has been the backbone of Bitcoin’s resilience, typically distributing coins only during strong bullish phases.
However, the indicator has now slipped below the critical level of 1, falling to 0.88. When SOPR drops under 1, it means coins are being sold at a loss on average. This marks the first such occurrence since the end of the 2023 bear market. Although the annual average remains elevated at 1.87, the recent breakdown signals a shift in behavior.
In practical terms, long-term holders are beginning to capitulate at the margins, locking in losses rather than waiting for a full recovery. That transition often reflects mounting financial pressure and declining confidence in near-term upside.
Binance Inflows Signal Active Repositioning
At the same time, on-chain data shows a notable increase in Bitcoin inflows from long-term holders to Binance. Recent sessions recorded daily inflows reaching roughly double the annual average, with several consecutive spikes highlighting unusually elevated activity.
Such movements are rarely random. Binance’s deep liquidity makes it a preferred venue for executing large transactions, meaning that heightened inflows from this cohort are typically associated with preparation to sell or actively rebalance positions.
The pattern has been visible since the last all-time high but has intensified in recent weeks. Sustained inflow spikes suggest this is not isolated profit-taking but part of a broader repositioning process among large, experienced holders.
Retail Distribution Accelerates
Ownership data further reinforces this shift. Over the past two years, individuals have sold more than 1.2 million BTC – over 6% of the circulating supply. Retail investors have steadily reduced their exposure while ETFs, funds, and public companies have absorbed a significant portion of the supply.
This structural redistribution highlights a changing market composition. As retail distributes and institutional vehicles accumulate, volatility dynamics and liquidity flows evolve accordingly.
However, the recent increase in exchange inflows suggests that selling pressure has not fully subsided.
Rising Selling Pressure in a Fragile Market
The combination of LTH SOPR slipping into loss territory and elevated Binance inflows creates a concerning backdrop. When historically resilient holders begin realizing losses and simultaneously move coins onto exchanges, it often precedes heightened volatility.
While this does not guarantee further downside, it signals that the correction is entering an adjustment phase. Even long-term participants are actively managing exposure rather than passively holding through the storm.
If this trend persists, Bitcoin could remain under pressure in the short to medium term, as supply coming from experienced holders adds to an already cautious market environment.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/market/selling-pressure-builds-as-bitcoin-veterans-begin-selling-at-a-loss/
