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Author: Zhao Ying, Wall Street News
Long-term holders of Bitcoin are continuing to sell, while the market’s capacity to bear it is shrinking rapidly. This supply and demand imbalance has plunged the cryptocurrency market into a slow and continuous decline.Since breaking through the historical high of US$126,000 in January this year, Bitcoin has fallen by nearly 30% and is currently hovering around US$85,000, making it difficult to find effective support.
According to a report by Bloomberg on Thursday, blockchain data shows that those “old people” (OG Bitcoin early holders) who have held the currency for several years are cashing out at the fastest speed in recent years.K33 Research reports that since the beginning of 2023, the number of Bitcoins that have not been moved for at least two years has decreased by 1.6 million, worth approximately $140 billion.In 2025 alone, Bitcoin worth nearly US$300 billion, which had been dormant for more than a year, will re-enter circulation.Data from blockchain analytics company CryptoQuant shows that,The past 30 days have been one of the most intense periods of selling by long-term holders in more than five years.
At the same time, the demand strength that absorbed the selling pressure over the past year is fading.Exchange-traded fund (ETF) capital flows have turned negative, derivatives trading volumes have dropped significantly, and retail investor participation has significantly reduced.The same supply now lands in a more fragile market with fewer active buyers.
This pressure is particularly evident after October 10th.At that time, President Trump made unexpected remarks about punitive tariffs, triggering a liquidation of $19 billion, setting a record for the largest single-day leveraged liquidation in cryptocurrency history.Since then, traders have withdrawn from the derivatives market, and there has been no obvious sign of rebound so far.
Selling pressure encounters liquidity vacuum
Chris Newhouse, research director of Ergonia, a research institution focusing on decentralized finance, said that the market is experiencing a slow bleeding, characterized by continued spot selling encountering weak buying liquidity, resulting in a slow decline that is more difficult to reverse than a leverage-driven plunge.
For much of the past, these sell-offs had been absorbed by an influx of demand from newly launched exchange-traded funds and crypto investment institutions.But now that need has subsided.ETF capital flows are negative, derivatives trading volume has declined, retail investor participation has become thinner, and the market’s ability to undertake has been significantly weakened.
Bitcoin briefly jumped to $90,000 on Wednesday, which traders attributed to heavy liquidation of short positions, but quickly resumed its decline.The original cryptocurrency fell back to the lower end of its trading range since the October crash, falling as much as 2.8% to $85,278.
The second largest “elderly” cash-out in history
K33 senior analyst Vetle Lunde pointed out that the current sell-off wave is rare in history.Unlike previous cycles, these reactivated Bitcoins are not driven by altcoin trading or protocol incentives, but by deep liquidity from US ETFs and institutional demand, allowing OG holders to realize profits at six-digit prices and significantly reduce ownership concentration.OG is a slang term used by cryptocurrency enthusiasts to describe early adopters and investors.
He said this year’s and last year’s sell-offs represent the second and third largest long-term supply reactivations in Bitcoin’s history, behind only 2017.
According to data from Coinglass, open interest in Bitcoin options and perpetual futures remains well below pre-crash levels in October.The decline suggests that most traders are still on the sidelines, with such markets accounting for the bulk of cryptocurrency trading volume.Meanwhile, basis trading—a strategy that exploits price differences in spot and futures markets—commonly used by hedge funds has also become unprofitable.
Selling pressure may be coming to an end
Despite the current heavy selling pressure, Lunde believes the sell-off by long-term holders may be coming to an end.Based on observations of historical on-chain flows, this reactivation is approaching a threshold.
“Looking ahead, seller pressure from long-term holders appears to be closer to saturation, with approximately 20% of Bitcoin supply being reactivated over the past two years,” Lunde wrote.”The sell-off in OG is expected to subside in 2026 and two-year supply will begin to rise as Bitcoin shifts to net buyer demand amid deeper institutional consolidation.“
However, before that, Bitcoin still needs to face the reality test of supply and demand imbalance.While new demand has not yet emerged, it is still unknown whether the market can find stable support at the current price.
