TLDR
- Bitcoin’s long-term holders have sold over $300 billion in Bitcoin this year.
- Since 2023, 1.6 million Bitcoin from long-term holders has been sold.
- ETF flows have turned negative, reducing market demand for Bitcoin.
- Bitcoin is nearing a threshold, with long-term selling pressure likely to ease in 2026.
Bitcoin has been under significant pressure in recent months as long-time investors continue to cash out their holdings. Despite reaching an all-time high above $126,000 earlier in the year, Bitcoin has now fallen nearly 30%, struggling to find support. A key factor in this downturn is the ongoing selling trend among long-term holders, who are divesting their coins at some of the fastest rates seen in recent years.
Rising Pressure From Long-Term Holders
According to data from K33 Research, the amount of Bitcoin that had remained untouched for at least two years has declined by approximately 1.6 million coins since early 2023. This represents a sell-off worth around $140 billion.
In 2025 alone, nearly $300 billion worth of Bitcoin that had been dormant for over a year has been reactivated and sold into the market. Blockchain analytics firm CryptoQuant noted that the past 30 days saw one of the heaviest distributions by long-term holders in over five years.
“The market is experiencing a slow bleed,” said Chris Newhouse, Director of Research at Ergonia, a decentralized finance firm. “This creates a grinding decline, which is harder to reverse than other types of market capitulation events.” As long-term holders sell into a thin market, Bitcoin is facing significant downward pressure.
The Declining Role of Institutional Demand
Throughout 2024 and into 2025, demand from institutional investors, including newly launched exchange-traded funds (ETFs) and crypto investment firms, had helped absorb some of the selling pressure from long-term holders. However, this demand has now faded, with ETF flows turning negative and derivative volumes declining. Retail participation in the market has also decreased.
The market is now struggling to absorb the reactivated supply of Bitcoin, as fewer active buyers remain. The market’s reliance on institutional demand has been evident, but the decreasing participation from these players has exposed Bitcoin to further pressure. With less liquidity available to absorb the supply, Bitcoin’s price has struggled to regain momentum.
The Impact of the October 2025 Crash
In October 2025, a sharp market crash occurred following unexpected comments by U.S. President Donald Trump about punitive tariffs. The resulting liquidations led to $19 billion in losses, marking one of the largest single-day leverage washouts in crypto history. This crash has left many traders sidelined, as evidenced by the decline in open interest for Bitcoin options and perpetual futures, according to Coinglass data.
Since the October crash, Bitcoin has been trading within a lower range, with a brief rally on December 17, where prices briefly reached $90,000. However, the rally was short-lived, and Bitcoin quickly returned to the lower end of its range. As the market remains cautious, traders are staying on the sidelines, hesitant to re-enter amid ongoing volatility.
Near-Term Outlook for Bitcoin’s Long-Term Holders
Despite the ongoing sell-off, there are indications that the pressure from long-term holders may soon ease. K33 Senior Analyst Vetle Lunde pointed out that approximately 20% of Bitcoin’s supply has been reactivated over the past two years.
This marks the second-largest long-term supply reactivation in Bitcoin’s history, surpassed only by 2017. Lunde noted that as long-term holders near the end of their selling cycle, the sell-side pressure should begin to subside in 2026.
“This could pave the way for a shift toward net buy-side demand,” Lunde added. He expects that, with greater institutional integration in the future, the market could transition to a more stable demand structure, reducing volatility. For now, however, the market remains under strain as the effects of long-term holders cashing out continue to unfold.
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