New money vs. old hands: Bitcoin enters a major holder reshuffle
Bitcoin is currently going through one of the sharpest sentiment reversals of this cycle. From its all-time high, the price has fallen by about 31%, pushing the market into one of the most bearish phases seen in years. Under the surface, however, the story is less about simple “selling” and more about who is selling, who is buying, and how this rotation could shape the next major move.
Why Bitcoin holdings are rotating to new investors
The core dynamic right now is a transfer of coins from veteran, long-term investors to newer market participants and institutions. Long-term holders (LTHs), typically defined as wallets that have held BTC for more than six months, have been unloading coins at unusually elevated levels since March 2024.
On-chain data shows that these long-term participants have sold around 1.4 million BTC since early March, one of the largest distribution waves on record for this cohort. This selling has been particularly notable among so‑called “OGs” – entities that not only hold large balances, but have also held them for extended periods. These older hands have trimmed their positions at least four distinct times since March 2024, breaking patterns of previous cycles where they tended to stay largely dormant during corrections.
Part of the reason is shrinking profitability. The realized price of Bitcoin—the average price at which the current supply last moved—sits near 38,600 dollars. As the market traded above that level for much of the recent cycle, many LTHs had substantial unrealized gains. The subsequent drawdown has eroded those paper profits, incentivizing some to lock in gains while they still can, especially those who accumulated at far lower levels in past years.
Is heavy long-term holder selling necessarily bearish?
At first glance, such aggressive selling by long-term holders looks alarming. Historically, these investors are viewed as “strong hands” that support price by refusing to sell into volatility. When they begin to distribute, it is often read as a sign of waning conviction or impending macro weakness.
However, the current phase is more nuanced. The 1.4 million BTC sold by LTHs since March 2024—worth about 121.17 billion dollars at recent prices—has not simply disappeared into speculative churn. A substantial share appears to have been absorbed by institutional vehicles and corporate treasuries, effectively reshaping, not destroying, demand.
This redistribution has an important structural effect: it decentralizes ownership further. Coins are moving out of very old, concentrated wallets into a broader mix of ETFs, public and private company treasuries, and newer market entrants. Over the long run, that can make the network less dependent on a small group of early adopters and reduce the systemic risk of a few huge wallets dominating supply.
ETF demand softens the blow
One of the most significant offsets to long-term holder selling has come from U.S. spot Bitcoin exchange-traded funds (ETFs). Between 1 March 2024 and 24 November 2025, assets under management in these products climbed from 42.77 billion dollars to 120.82 billion dollars.
That jump implies roughly 78.05 billion dollars of net Bitcoin accumulation through ETFs over that period. When set against the 121.17 billion dollars in BTC distributed by long-term holders, it leaves a deficit of about 43 billion dollars—meaning not all LTH supply has been soaked up by ETFs alone, but a large portion has.
This ETF-driven demand matters for two reasons:
1. It channels traditional capital markets money directly into Bitcoin without requiring investors to manage private keys or exchanges.
2. It introduces a different type of holder base: institutions and advisors with longer planning horizons and regulatory oversight, which can moderate some of the extreme retail-driven volatility.
The role of corporate and institutional treasuries
ETFs are not the only institutional pipeline. Bitcoin treasury holdings are now distributed across 134 entities, collectively controlling around 1.686 million BTC, worth approximately 145 billion dollars at recent prices.
If you aggregate ETF inflows with those treasury balances and compare them to the total LTH selling since March 2024, the picture turns net positive. Rough estimates point to a cumulative net inflow of about 102 billion dollars into Bitcoin from these institutional and treasury channels, even before considering smaller-scale retail or short-term trader activity.
This suggests that, while old holders have been reducing exposure, other forms of long-term capital are stepping in. The profile of the “long-term holder” is evolving—from anonymous early adopters and miners to a blend of funds, corporations, and high-net-worth investors managing Bitcoin as part of diversified portfolios.
Short-term holders under intense pressure
While long-term holders have been realizing profits, short-term holders (STHs)—those who acquired their coins more recently—are facing a very different reality. Many of them are now sitting on considerable unrealized losses, and a large fraction are capitulating.
A key gauge here is the Short-Term Holder Spent Output Profit Ratio (STH-SOPR), which tracks whether coins moved by short-term holders are being sold at a profit or a loss. Recently, this metric has hovered near 1 and at times dipped toward zero, indicating that a significant portion of STHs are selling roughly at their cost basis or even at sizeable losses.
Historically, such phases of short-term holder capitulation often coincide with market exhaustion. When most weak hands have already sold and few are left with the incentive or ability to panic-sell further, selling pressure tends to subside—creating fertile ground for a mid-term reversal.
What short-term holder behavior means for the next move
The combination of heavy LTH distribution and STH capitulation might sound ominous, but market bottoms often form when both groups are under pressure for different reasons. Long-term holders are scaling out after years of gains, while short-term participants are forced out by fear and losses.
When STH-SOPR hovers around zero or just below it, previous cycles show a pattern: after a period of choppy, directionless trading, the market often transitions into a mid-term uptrend. That’s not a guarantee, but it highlights that forced selling at scale tends to be finite. Once completed, even modest new demand can have an outsized positive impact on price.
If this relationship holds, the current phase could be laying the groundwork for a recovery that eventually attempts to reclaim the 90,000 dollar region, provided broader conditions turn supportive.
Macro conditions: the missing ingredient
For any sustained recovery, Bitcoin will need more than just on-chain exhaustion. Macro factors remain crucial. Several elements are particularly important:
– Risk sentiment: Appetite for risk assets needs to improve. When equities, tech, and high-beta sectors are under pressure, Bitcoin often struggles to attract fresh capital.
– Interest rates: Expectations of interest rate cuts typically reduce the appeal of cash and short-term bonds, pushing investors toward higher-yielding or higher-risk assets, including digital assets.
– U.S. dollar strength: A weakening dollar historically supports commodities and alternative assets. A strong dollar, by contrast, often weighs on Bitcoin’s performance.
Global liquidity has stayed in a wide but relatively stable range between roughly 25 trillion and 50 trillion dollars. It has not yet provided the kind of broad “wall of money” that powered previous parabolic crypto rallies. That makes a sudden, purely liquidity-driven surge in Bitcoin less likely in the immediate term, though local improvements in funding conditions could still ignite a strong mid-term trend.
Why this rotation may be healthy in the long run
Despite the discomfort of a 31% drawdown, the current holder reshuffle can be interpreted as a maturation phase for Bitcoin’s market structure:
– Ownership broadening: Coins are moving from concentrated OG holders to a mix of retail, institutions, and corporate treasuries.
– Market resilience: A more diverse holder base can absorb shocks better than a market dominated by a few large, illiquid wallets.
– Price discovery: Heavy selling by experienced investors and capitulation by late entrants helps reset expectations, flush out leverage, and establish more sustainable price levels.
In previous cycles, similar redistributions set the stage for later advances once macro headwinds eased and new demand arrived. The key question is not whether long-term holders are selling, but who is on the other side of those trades—and at what time horizon they are investing.
What this means for different types of participants
For various market actors, the current environment implies different strategic considerations:
– Long-term investors: Those with multi-year horizons may view aggressive LTH selling and STH capitulation as a sign that risk is shifting from downside to opportunity, especially if they believe in long-run adoption and scarcity dynamics.
– Short-term traders: Volatility around capitulation zones can be extreme, with sharp squeezes and fakeouts. Managing leverage and position size becomes critical.
– Institutions and treasuries: The data indicates that large players continue to accumulate in size. That can reassure other capital allocators that Bitcoin is increasingly being treated as a strategic asset rather than a passing fad.
Key risks to watch
Despite constructive structural trends, several risks remain:
– Macro shock: A deeper global recession, unexpected monetary tightening, or significant credit stress could force broad de-risking, including from Bitcoin.
– Regulatory shifts: Sudden policy changes or restrictive regulations in major jurisdictions could dampen institutional appetite or disrupt access channels.
– Sentiment overshoot: If fear continues to dominate and retail interest collapses further, Bitcoin could undershoot fair value for a prolonged period before recovering.
Monitoring on-chain indicators (like LTH and STH behavior), derivatives positioning, macro data, and policy signals together provides a more complete view than price alone.
Outlook: cautious in the short term, constructive in the mid term
In the near term, Bitcoin is navigating one of the most pessimistic stretches of this cycle, with both old and new holders under distinct pressures. Yet, beneath the surface, large volumes of BTC are transitioning into the hands of institutions, ETFs, and corporate treasuries, while short-term holders are approaching exhaustion.
If historical relationships between capitulation, SOPR behavior, and subsequent price action hold, the current environment may represent a mid-term accumulation and reset phase rather than the start of a deep, prolonged bear market. A decisive return of risk appetite, easier monetary policy, and a softer dollar would significantly increase the odds of a robust recovery attempt, potentially targeting the 90,000 dollar region over time.
Until then, the market remains in a delicate balance: old hands are cashing out, newcomers and institutions are quietly buying in, and the next major move will likely be determined by how quickly macro conditions shift in Bitcoin’s favor.
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This material is for informational purposes only and should not be interpreted as financial or investment advice. Buying, selling, and trading cryptocurrencies involves a high level of risk, and every reader should conduct independent research and consider their financial situation and risk tolerance before making any investment decisions.