The recent tariff tensions have sent markets into turmoil. Over the past two months, BTC dropped from $100K to $80K. As highlighted in the April 4th "Jiaolian Internal Report," long-term holders (LTHs) cashing out during price rallies has significantly suppressed market momentum.
Diverging Data Trends
Profit Realization Patterns
Glassnode's Realized Profit Data (2024-2025):
- Nov 2024-Jan 2025: STHs (short-term holders) realized 56% of profits vs. LTHs' 42%.
- March 13-25 Rally: LTH profit-taking spiked to 70%, while STHs accounted for just 10%.
Supply Dynamics
- Late 2024 to early 2025: LTHs transferred holdings to STHs.
- Post-March decline: STHs sold at a loss while LTHs accumulated.
The Dual Role of LTHs in Bull Markets
Long-term holders act as market stabilizers due to their low turnover and high conviction. However, during late-cycle bull markets, their sell-offs often trigger corrections.
Current Market Nuances
- Macroeconomic Pressures: Fed rate-cut uncertainties, trade wars, and equity market declines amplify LTHs' liquidity concerns.
- Policy-Driven Sell-Offs: Profit-taking now doubles as a hedge against geopolitical instability.
Path to a Market Bottom
Two critical factors emerge:
- Supply Absorption: LTH sell-offs accelerate coin redistribution from strong hands to speculative STHs. If STHs become "involuntary LTHs" (holding through downturns), the average cost basis rises—laying groundwork for future rallies.
- Liquidity Catalysts: Potential Fed rate cuts/QE could reignite risk-asset demand, with BTC benefiting from its "fiat hedge" narrative.
Key Price Threshold
- LTHs' average cost base: $81,000 (~300K BTC supply).
- The $80K level now serves as a critical support zone. A breakdown risks stop-loss cascades or triggers accumulation opportunities.
Strategic Takeaways for Investors
Short-Term Outlook
- Expect heightened volatility from LTH sell pressure.
Long-Term Indicators
- $80K Support Validation: Confirming this as a cycle bottom is essential.
- Fed Policy Timeline: The scale/timing of liquidity injections will dictate rebound potential.
Historical Parallels
Market capitulation phases often precede reversals. A synchronized LTH surrender and liquidity influx could propel BTC upward in late 2025—requiring disciplined patience.
FAQ: Navigating LTH Sell-Offs
Q: Why are LTHs selling now?
A: Combination of profit-taking and macro risk hedging against policy shifts.
Q: How does STH behavior affect BTC's bottom?
A: STH capitulation indicates panic selling, often marking local bottoms when paired with LTH accumulation.
Q: What’s the significance of the $80K level?
A: It represents LTHs' breakeven point—a psychological and economic support zone.
Q: Could tariffs impact BTC positively?
A: Yes. Currency devaluation fears may drive capital toward BTC as a hedge. 👉 BTC’s role in macroeconomic turbulence
Q: When might the next bull phase begin?
A: Likely post-Fed policy clarity, with sustained recovery hinges on liquidity conditions. 👉 Tracking Fed decisions
Data sources: Glassnode, BitMEX research. This analysis excludes investment advice—conduct independent due diligence.