- Bitcoin investors are choosing to de-risk amid uncertainty
- If history is any guide, volatility can be an engine
Bitcoin’s [BTC] volatility is its greatest strength – and its deepest flaw. Even with institutions buying in, corporates holding strong, and smart money accumulating, it’s been 120 days since BTC came close to $110k.
So, what’s stopping it? As AMBCrypto flagged, investors have been locking in profits to dodge deeper drawdowns.
While that might seem bearish, it hasn’t been without any strategic upside. In that sense, Bitcoin’s volatility might be building momentum for the next leg up.
Long-term holder distribution and volatility signals
The attached chart revealed a significant trend.
Since November 2023, Long-Term Holders (LTHs) – those with BTC aged 18 months to 3 years – have offloaded over 2 million coins. They have netted roughly $138 billion in realized gains.
This steady decline in LTH supply, from a peak of 4.254 million down to 2.176 million BTC, is a sign of a clear distribution phase. In fact, it looks a lot like what we’ve seen during past bear markets.
Most notably in 2022, when a similar pattern preceded a 63% annual drop from Bitcoin’s $46,017 opening.
What makes the current cycle different is the outcome. Despite comparable levels of long-term distribution and profit-taking, Bitcoin has continued to trend higher. It is up nearly 200% during the same phase.
That tells us something’s changed. Instead of causing a crash, all this selling and volatility might be shaking things up and setting the stage for stronger, smarter accumulation.
Bitcoin’s next big opportunity
Monitoring this cohort closely is essential. Based on their current BTC treasury, data-driven analysis from a leading expert projects that up to 500k Bitcoin could enter the market by year-end.
This could mean the buildup of a significant wave of exit liquidity beneath the surface.
According to AMBCrypto, such a release will inevitably put Bitcoin’s volatility under renewed pressure. Hence, testing the market’s capacity to absorb large-scale distribution without disrupting the broader uptrend.
However, with institutional and corporate interest in Bitcoin now surpassing levels seen in the 2023–24 cycle, this volatility might be less like a threat. Instead, it could be more like another opportunity.
If history is any guide, Bitcoin could once again demonstrate its resilience, offering bulls a strategic entry and setting the stage for further price discovery.
