A recent analysis from cryptocurrency research firm Alphractal suggests that Bitcoin’s Long-Term Holders (LTHs) may soon begin a significant sell-off, based on shifts observed in key on-chain metrics.
According to the firm, these metrics point to rising activity among LTHs, which could potentially trigger selling pressure on the market.
One key factor highlighted by Alphractal is the VOCDD (Volume of Coins Destroyed) and MVOCDD (Moving Volume of Coins Destroyed) metrics. These tools help evaluate how the rate of coin destruction aligns with Bitcoin’s current market price, compared to the average purchase price of LTHs. The firm believes that when these metrics show certain trends, it signals that the market may be facing a shift, especially if coins held by LTHs are being sold.
In addition to these metrics, the Reserve Risk indicator provides insight into the overall sentiment of the market, indicating whether Bitcoin is overbought or oversold. The firm also points to the MVOCDD signal, a tool used to detect market peaks, suggesting that LTHs could be nearing the end of their holding periods.
Alphractal’s refined metric, the “Fixed Terminal Destroyed Coin Days,” offers a more adjusted view of LTH activity. By factoring in Bitcoin’s circulating supply, this metric provides a clearer picture of when significant movements or prolonged inactivity occur among LTHs.
Historically, when Bitcoin prices surge, LTHs tend to take profits by selling, especially when their purchase prices are much lower than the current market value. This selling behavior can create resistance levels in the market, hindering Bitcoin’s upward momentum. While Bitcoin’s price might continue to rise in the short term, Alphractal warns that LTHs could become less willing to hold, which could affect market dynamics heading into 2025.
