Bitcoin at $85K: Long-Term Holders Gain Strength as Weak Hands Exit

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March 27, 2025 by Mishal Ali

Key Takeaways:

Bitcoin Short-Term Holders face rising financial pressure, while Long-Term Holders accumulate.
Demand remains weak, with realized profit and loss volumes dropping significantly.
Market conditions suggest a potential capitulation event if selling pressure intensifies.

Bitcoin’s price continues to trade within the $85,000 range, with demand-side forces remaining relatively weak. The market has seen a sharp decline in realized profit and loss volumes, dropping 85% from the $109,000 all-time high. This contraction indicates a shift in investor sentiment, with fewer transactions locking in substantial gains or losses.

According to the Glassnode report, short-term holders, most sensitive to price movements in the first place, are the ones taking the hit on losses. They entered at higher prices and now find themselves underwater, contributing to the selling pressure.

Today the Short-Term Holder supply is above 90%, a level we have not seen since July 2018. Previously, such high levels have resulted in significant market corrections.

Meanwhile, Long-Term Holders are profiting and staying financially healthy. Their long market exposure allows them to weather volatility and secure leadership in the market cycle. The difference between these two sets of investors reflects ongoing wealth transfer, with experienced owners absorbing supply from weaker hands.

Lack of New Demand Slows Bitcoin’s Momentum

Sustainable bull markets thrive on money flowing in, but the current cycle is marked with stagnation. The balance between Long-Term Holder profit-taking and Short-Term Holder losses is now in neutral mode, marking reduced market momentum. It shows the lack of fresh demand and therefore the extended consolidation period.

The capital flows in the Bitcoin network reflect the dynamics between capital destruction and capital inflows. The investments into the market create realized gains, and the losses realized through sell-offs reflect capital destruction.

The in-flows are not yet strong enough to offset the losses to Short-Term Holders. The disparity is raising concerns regarding the market’s capacity to remain in an upward direction without fresh buying interest.

Despite weaker inflows, Long-Term Holders continue to add on. Their share in total wealth in Bitcoin is now 40%, and it indicates growing conviction on the part of seasoned investors. Such marginal absorption in supply can support prices in the longer term if panic selling does not accelerate.

Bitcoin Long-Term Holders Strengthen Their Position

The investing environment for Bitcoin is shifting, with Long-Term Holders holding strong amidst market fluctuations. Based on past history, bull cycles peak when the majority of Bitcoin wealth is moved from seasoned holders to new purchasers.

But in the present cycle, Short-Term Holders have not yet reached the all-time highs in ownership levels of past bull cycles with a high of just 50%, lower than the highs in past cycles where they controlled up to 90% of network wealth.

Institutional investment and market maturity would be the reasons for such a trend. ETFs and large investors would be holding on to Bitcoin for longer times and reducing the high turnover seen in the past cycles. The market is also experiencing longer periods of consolidation, and there is a smoother accumulation process in place.

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