Bitcoin LTHs continue to sell at a loss, all despite…

Bitcoin has seen wide swings in 2022 as it fell massively during this bear market. One aspect that has become more important recently is the sentiment of long-term owners. Selling pressure on LTHs has eased as prices rose through July above average cost basis – $22.6k.

However, despite the reduction of financial constraints, LTHs continue to sell at net losses of between 11% and 61% on average. Could this selling pressure fuel unwarranted FUD in market sentiment as it tries to recover?

Gather the crowd

Despite uncertainty in the macro landscape, the crypto market has been gradually recovering since the beginning of July. Bitcoin itself has overseen a steady growth during this period as it briefly reached the $24k level. However, concerns are emerging following the latest episode of selling pressure from the long-term holder cohort, as reported by Glassnode.

Right now, Bitcoin long-term owners are in possession of over 13.337 million BTCs, 79.85% of the total circulating supply. However, since the beginning of May, they have distributed around 222k BTC – Equivalent to about 1.6% of their all-time-high holdings.

Source: Glassnode

The LTH cost basis was trading at $22.6,000 at press time, meaning the long-term holdings are averaging a 4% gain. This is because BTC was trading just below $23.2k at the time of writing. This would mean that the press time MVRV ratio represented profitability for these long-term owners.

Source: Glassnode

There has also been a significant change in the market sentiment of long-term owners over the past three weeks. Their aggregate behavior has changed from accumulating at a rate of 79 BTC/month to distributing up to 47k BTC/month.

As pointed out in the report,

“Remarkably, this group seized the opportunity to increase prices and spent 41,000 BTC, or 0.3% of the supply, in the last 21 days. (Note that net spend is defined as Accumulation plus HODLing minus Distribution).”

Source: Glassnode

“Bitcoin to the Moon”

Sentiment also pointed out an interesting development on social media among Bitcoin enthusiasts. Bitcoiners repeated their sarcastic chants of “moon” and “lambo” on social media during the crypto slide this year.

However, peaks in these words are often indicative of a bullish BTC rally.

Source: Sentiment

Conclusion

Institutional sales have also been pointed out in the news recently. The most famous of them was Tesla which recently sold over 75% of its BTC holdings.

While these indicators appear to be fueling FUD sentiment in the market, BTC continues to maintain support levels. Bitcoin has remained relatively flat over the past 24 hours, but was down over 2.8% for the week.