Bitcoin’s recent rise above $104,000 has generated discussions among traders, with on-chain statistics showing a significant shift of BTC from long-term holders (LTHs) to short-term holders (STHs), suggesting profit-taking during this mid-bull phase.

According to industry experts, the dynamic between LTHs and STHs will be crucial in determining whether Bitcoin continues its upward trajectory or declines below $100,000.

LTHs Cashing Out as Price Stalls Above $100K

Market observer JA Maartunn has characterized this moment as a “mid-bull phase,” where LTHs start selling after periods of accumulation. As outlined in a recent thread on X, they noted:

“LTHs build bottoms; STHs build tops.”
“LTHs build bottoms; STHs build tops.” (Translation: Long-Term Holders create price floors while Short-Term Holders create price ceilings.)

Recent data reveals that approximately 363,000 BTC have transitioned from LTH wallets to STHs over the past month, indicating profit-taking rather than renewed accumulation.

LTHs presently control about 73.6% of Bitcoin’s total supply, equating to roughly 14.62 million BTC, which is near all-time highs. Additionally, dormant BTC in older wallets is being activated, as noted by Maartunn. In the past year, 1.17 million BTC aged between three and five years were moved, along with noticeable transfers of BTC held for over seven to ten years.

The Coin Days Destroyed metric, which tracks long-term spending, stands at 17.48 million, further confirming that seasoned investors are gradually reallocating their holdings into market strength.

This profit-taking coincides with rising volatility in Bitcoin’s market price. Following a dip below $99,000, Bitcoin rebounded to about $104,000 on Thursday, only to drop slightly to approximately $103,000 during this report. While this indicates a 1.2% increase over the past 24 hours, it still represents a 6.7% decline from the past week and nearly 17% below its historic peak of over $126,000 earlier in October.

Focus Shifting to Short-Term Holders as Market Awaits Direction

The main concern now is whether short-term holders will maintain their positions. According to Maartunn’s analysis, Bitcoin could face further declines if this group falters. However, if they continue purchasing and hold their ground, they may drive prices upward.

Signals suggesting this possibility include the Fear and Greed Index moving into “Extreme Fear,” historically a sign of local bottoms and potential buying opportunities. With exchange balances nearing a seven-year low of 2.38 million BTC, immediate selling pressure seems limited.

Market analysts are closely monitoring the $100,000 to $104,000 price zone, identifying it as a critical area where liquidity was absorbed previously. This indicates it could serve as a foundation for a stronger upward trend. Analyst Michaël van de Poppe suggests that a move above $112,000 would reaffirm a return to a bullish trend.