Unveiling the Market Influence of Bitcoin’s Permanent Holders

Key Points

• Bitcoin experienced a minor pullback but maintains an overall uptrend, driven by long-term holders.
• Long-term holders’ supply dominance and strategic trading behavior support a bullish outlook for Bitcoin.

Bitcoin, the leading cryptocurrency, recently experienced a slight decrease in value, dropping by 0.66% within the last 24 hours.

However, despite this minor setback, Bitcoin’s long-term holders remain optimistic about the cryptocurrency’s future.

Bitcoin’s Upward Trend

For almost two weeks, Bitcoin has been on an upward trajectory, reaching a new high of $109k four days ago. Even after some minor pullbacks, Bitcoin was trading at $104,337 at the time of writing, maintaining its uptrend.

This steady momentum is largely due to the behavior of Bitcoin’s long-term holders.

Long-term Holders’ Influence

CryptoQuant suggests that Bitcoin is currently caught in a fierce battle between long-term holders and speculative FOMO. Long-term holders’ supply dominance remains high, reflecting their strong conviction. They continue to accumulate Bitcoin when prices drop and strategically take profits when prices surge, thereby limiting market selling pressure.

In contrast, short-term holders tend to increase their activity during price rallies, indicating speculative interest. However, their significant distribution when prices drop shows weaker hands exiting the market, contributing to short-term volatility.

With long-term holders owning a significant share of the supply, Bitcoin’s market appears to have matured. The decreasing influence of short-term holders on supply could reinforce market stability, although their speculative behavior may still drive short-term price swings.

This dynamic positions Bitcoin for a bullish outlook throughout 2025. Strategic profit-taking by long-term holders could trigger healthy pullbacks, providing opportunities for new accumulation.

Market Indicators

While this analysis presents a promising outlook for Bitcoin, it’s essential to examine other market indicators. For instance, Bitcoin’s fund flow ratio has increased from 0.05 to 0.11 over the past week, suggesting more capital is flowing into Bitcoin than leaving, indicating accumulation behavior.

Moreover, Bitcoin’s SOPR declined from 1.05 to 1.01, implying that with Bitcoin trading sideways, holders are reluctant to sell, leading to supply scarcity and price appreciation. This suggests the market is absorbing potential selling pressure without a significant downturn on the charts.

This scarcity is confirmed by the rising stock-to-flow ratio, which spiked from 124 to 599.03, indicating more investors are keeping their assets off exchanges, either in private wallets or cold storage.

In light of these observations, it appears that the strategic positioning of long-term holders is leading to a maturing market with potential for upside. This positive perception from long-term holders plays a crucial role in absorbing selling pressure. If the market conditions remain stable, Bitcoin could reclaim the $107k mark and potentially hit $110k. However, a sustained correction could result in a drop to $102,770.