Research firm Compass Point has pointed out that Bitcoin’s most faithful long-term holders have joined the current sell-off wave, which may signal a turning point in the cryptocurrency downturn. In a report, Compass Point analyst Ed Engel stated that long-term holders—addresses that have held Bitcoin for at least 155 days—remained largely inactive between February and April but have shifted to net selling in recent weeks. Over the past two days, these long-term holders have sold approximately $2.4 billion worth of Bitcoin, significantly impacting supply-demand dynamics.
Engel also noted that 26% of the Bitcoin sold over the past 30 days came from investors whose cost basis was above $90,000. These buyers, who purchased at high prices, had shown resilience throughout the bear market but ultimately began to capitulate as Bitcoin approached new cycle lows. Engel believes that the capitulation of high-cost buyers is a common feature of the late stages of a bear market, reinforcing the view that the Bitcoin bear market has entered its final phase.
Suppressed by geopolitical uncertainty, Bitcoin’s price has struggled to recover to its all-time high of over $126,000 reached in October last year. Meanwhile, U.S. stock markets have continued to hit new highs. This divergence has led investors to question two core narratives about Bitcoin: first, that as “digital gold” it should benefit from geopolitical uncertainty, and second, that its performance should resemble that of high-beta tech stocks.
According to data from SoSoValue, on Tuesday, Bitcoin ETFs recorded their 12th consecutive day of net outflows, setting a new record for the longest consecutive outflow streak. The net assets of Bitcoin ETFs have fallen from $107.8 billion on May 14 to $85 billion. On Monday, a small sale of 32 Bitcoins by Strategy (MSTR) triggered some panic selling, which in turn set off a cascade of long position liquidations, accelerating downward pressure. As of this week, Bitcoin has fallen 10% cumulatively. However, analysts generally believe that Strategy’s sell-off is not the main factor behind the current price decline.
Citi analyst Alex Saunders stated that ETF fund flows are a major driver of Bitcoin price increases, explaining approximately 45% of weekly return volatility. Recent fund flows have been persistently negative, while the likelihood of a U.S. market structure bill passing—a potential catalyst to rekindle investor interest—is diminishing. Unless there is positive regulatory news or growing concern over fiscal conditions, market sentiment is expected to remain sluggish.
Bitcoin (BTC) has fallen below $70,000, even dipping under $67,000, down nearly 50% from its peak of over $126,000 in December last year. Investors may be concerned about rising inflation and interest rate hikes, which typically have a negative impact on speculative investments like Bitcoin. For Bitcoin to rebound, a catalyst is needed, such as improving economic conditions or rising expectations of interest rate cuts, but no such anticipated event appears imminent.
If you believe in Bitcoin’s ambitious long-term price targets—for example, Ark Invest’s Cathie Wood predicts Bitcoin could rise well above $1 million in the next five years—then buying now might seem like a no-brainer. However, Bitcoin’s valuation is highly speculative, and its value can and has changed rapidly. If you are skeptical about its future, even a price below $70,000 may still not be worth buying. The ultimate decision depends on personal opinion. Bitcoin is an extremely high-risk asset, so even if you choose to buy, you should only hold a small position (no more than 5% of your portfolio).
