界网报道：
Recently, the price of Bitcoin is making an effort to return to its historical peak. In this article, we will study the contributions of long-term and short-term holders to the market supply and demand during this period. As a supplement to this study, we will also use new segmentation indicators to evaluate the consumption and investment behavior of different subgroups of long-term investors and their impact on the market.
Summary
Since Bitcoin hit a historical high of $73,000 in March, the upward momentum has stalled and the market has been in a consolidation phase. According to our analysis, the momentum of market demand has turned negative since early May.
This article will analyze the cost basis of short-term investors and use it as a target to analyze how capital is flowing into the market at the current stage.
In order to analyze the role of the supply side in the market, this article examines the investment activities of long-term holders and finds that the unrealized profits held by this group are statistically much lower than the previous historical peak.
By focusing on the behavior of long-term holders selling their Bitcoin assets, it can be seen that although this part of investors selling Bitcoin assets only accounts for 4% to 8% of the total market sales, the profits they obtain from selling these Bitcoin assets usually account for 30% to 40% of the accumulated profits during a bull market. This finding highlights the fact that market profits are concentrated in the Bitcoin held by long-term holders, and these profits are gradually realized during the bull market, which has not disappointed the patience of these “diamond hands” (referring to investors who hold high-risk assets such as Bitcoin firmly in the face of market volatility).
Tracking market demand
In previous analysis articles, we proposed a method to track the inflow or outflow of capital into the market, determine the direction of capital flow in the market, and estimate its scale. Here, we will continue to use this method, using the time of holding Bitcoin assets as a scale to segment short-term holder groups and deepen our analysis:
When the cost basis of short-term holder groups rises, it indicates that new buyers are buying Bitcoin assets at higher prices. At this time, capital is in a net inflow state into the market (and vice versa).
When the spot price deviates from the current cost basis upwards (or downwards), we can use the MVRV ratio to approximate the unrealized profits held by each group.
We can use the MVRV value to measure the incentive of profits to investors (when the MVRV reaches a high level), or to discover the harbinger of exhausted sellers (when the MVRV falls to a low level).
First, we will compare the spot price with the cost basis of two groups of short-term holder groups:
Holders with a holding time of 1 week to 1 month.
Holders with a holding time of 1 month to 3 months.
Thus, we can determine how capital is flowing and changing at a macroscopic level in the early stages of bull and bear markets. The figure below shows how these two price models supported the entire market during the bull market of 2023-24.
Since mid-June, the spot price of Bitcoin has fallen below the cost basis of holders with a holding time of 1 week to 1 month ($68,500), and even below the cost basis of holders with a holding time of 1 month to 3 months ($66,400). According to historical experience, if this situation continues, it will undermine investor confidence and may lead to a deeper price correction. Undoubtedly, the market will need more time to recover from this deep correction.
We can also describe the current market momentum by comparing the cost bases of these different subgroups of short-term investors:
Capital inflow: At this time, the cost basis of holders with a holding time of 1 week to 1 month is higher than that of holders with a holding time of 1 month to 3 months. At this time, the positive momentum of the market is very obvious, and strong market trends are continuously attracting new capital into the market.
Capital outflow: At this time, the market shows a completely opposite situation—the cost basis of the former falls below that of the latter. This market structure indicates a weakening of demand momentum, and the market begins to experience a net outflow of capital.
This negative capital flow structure has occurred a total of five times in the previous bull market. In addition, we can also see that this structure has formed since May and has continued until early June.
Market supply side analysis
In order to fully understand the current market, we need to introduce indicators related to the behavior of long-term holders for further analysis. The long-term holder group is the main supplier of the market during the bull market, as they will sell the Bitcoin they hold in the market to seek profit-taking. In a sense, the formation of the market cycle top can be partially attributed to the continuous increase in the scale of Bitcoin sales by long-term holders, which will eventually exhaust the new demand pouring into the market during the bull market.
In the figure below, we will compare the key multiples of the Bitcoin spot price and the average cost basis of the long-term holder group (i.e., the realized price of the long-term holder group).
1.0 times the realized price of the long-term holder group (green line in the figure): In our historical experience, the appearance of this situation is consistent with the formation stage of the bear market cycle bottom and the market recovery stage.
1.5 times the realized price of the long-term holder group (orange line in the figure): This price position is often seen as the watershed of the long cycle market equilibrium stage during the market recovery stage and the bull market. During this period, although the price of Bitcoin will continue to rise, the rate of increase is very slow. On average, the unrealized profits held by long-term holders at this stage are about 50%.
3.5 times the realized price of the long-term holder group (red line in the figure): This price is the boundary between the equilibrium stage and the euphoric stage of the bull market. Once this stage is reached, the price of Bitcoin usually rises rapidly. Moreover, at this stage, the unrealized profits held by long-term holders are about 250% or even higher. With such high profit incentives, long-term holders often accelerate the sale of their Bitcoin assets.
If we use the above framework to analyze the current cycle, it can be found that from a macro perspective, the current bull market trend is very similar to the cycle in 2017. The most similar point between the two is that when Bitcoin… 
Figure 1: Realized prices of short-term holder groups with different holding periods
We can also describe the current market momentum by comparing the cost bases of these different subgroups of short-term investors:
Capital inflow: At this time, the cost basis of holders with a holding time of 1 week to 1 month is higher than that of holders with a holding time of 1 month to 3 months. At this time, the positive momentum of the market is very obvious, and strong market trends are continuously attracting new capital into the market.
Capital outflow: At this time, the market shows a completely opposite situation—the cost basis of the former falls below that of the latter. This market structure indicates a weakening of demand momentum, and the market begins to experience a net outflow of capital.
Figure 2: Capital flow situation of short-term holders
Market supply side analysis
In order to fully understand the current market, we need to introduce indicators related to the behavior of long-term holders for further analysis. The long-term holder group is the main supplier of the market during the bull market, as they will sell the Bitcoin they hold in the market to seek profit-taking. In a sense, the formation of the market cycle top can be partially attributed to the continuous increase in the scale of Bitcoin sales by long-term holders, which will eventually exhaust the new demand pouring into the market during the bull market.
In the figure below, we will compare the key multiples of the Bitcoin spot price and the average cost basis of the long-term holder group (i.e., the realized price of the long-term holder group).
1.0 times the realized price of the long-term holder group (green line in the figure): In our historical experience, the appearance of this situation is consistent with the formation stage of the bear market cycle bottom and the market recovery stage.
1.5 times the realized price of the long-term holder group (orange line in the figure): This price position is often seen as the watershed of the long cycle market equilibrium stage during the market recovery stage and the bull market. During this period, although the price of Bitcoin will continue to rise, the rate of increase is very slow. On average, the unrealized profits held by long-term holders at this stage are about 50%.
3.5 times the realized price of the long-term holder group (red line in the figure): This price is the boundary between the equilibrium stage and the euphoric stage of the bull market. Once this stage is reached, the price of Bitcoin usually rises rapidly. Moreover, at this stage, the unrealized profits held by long-term holders are about 250% or even higher. With such high profit incentives, long-term holders often accelerate the sale of their Bitcoin assets.
If we use the above framework to analyze the current cycle, it can be found that from a macro perspective, the current bull market trend is very similar to the cycle in 2017. The most similar point between the two is that when Bitcoin…When the price is consolidating below the historical peak, the market performance is in complete agreement with the phase of equilibrium and euphoria described by the metric of 3.5 times the long-term holder group’s realized price point (as shown by the red line in the image).
Image 3: Average Basis Multiple of Long-Term Holders
The unrealized profit held by the long-term holder group can be seen as a psychological benchmark to measure their willingness to sell their Bitcoin assets for profit. We can use the LTH-NUPL (Long-Term Holder Net Unrealized Profit/Loss) metric to visually display the psychological motivation of long-term holders when making investment decisions.
As of the writing of this article, the LTH-NUPL is at 0.66, indicating that the current market is approximately in the “pre-euphoria” phase (as shown by the green line in the image). The Bitcoin market has been in this phase for a prolonged period of 96 days, similar to the market’s behavior in the 2016-17 cycle.
Image 4: Long-Term Holder’s NUPL Indicator (LTH-NUPL)
By using the long-term holder expenditure binary indicator, we can identify the periods when long-term holders are likely to sell their Bitcoin assets on a large scale. This allows us to determine different stages of long-term holder selling behavior:
Weak sell-off phase, where the Bitcoin supply from long-term holders has decreased for at least 3 days in the past 15 days.
Normal sell-off phase, where the Bitcoin supply from long-term holders has decreased for at least 8 days in the past 15 days.
Strong sell-off phase, where the Bitcoin supply from long-term holders has decreased for at least 12 days in the past 15 days.
Image 5: Long-Term Holder Expenditure Binary Indicator (Last 15 Days)
Our next chart aims to comprehensively evaluate and visualize the sentiment and investment behavior of long-term investors by combining the two models mentioned above. This will help us analyze the motivations that lead them to cash out profits (or losses) and exit, and how they actually operate.
We consider four different motivations that lead long-term investors to liquidate their assets and exit:
Surrender: When the spot price of Bitcoin is below the long-term holder’s basis, any large-scale sale of Bitcoin assets can be attributed to investor confidence collapse and panic selling.
Transition: When the spot price is slightly above the long-term holder’s basis, occasional sales of small amounts of Bitcoin assets may occur, typical of daily trading.
Equilibrium: After the market recovers from a prolonged bear market, a new balance is struck between a small influx of new demand, reduced liquidity, and gradual profit-taking by underwater holders from the previous cycle. Large-scale asset sales from long-term holders in this stage are usually related to sudden price rebounds or corrections.
Euphoria: As a sign of this stage, the LTH-MVRV indicator will surpass the threshold of 3.5, and the level of the indicator will trend similarly to the level when the market reached the historical peak in the previous cycle. In this stage, the average unrealized profit held by the long-term holder group exceeds 250%, driving the market into a euphoric upward phase, leading these long-term holders to accelerate the sale of their substantial Bitcoin assets to cash out profits.
Using this method, we can see that there were large-scale asset sales by long-term holders in the fourth quarter of 2023 and the first quarter of 2024, driving the market to continue rising during this period and subsequently re-enter a new equilibrium state.
Image 6: Long-Term Holder’s Selling Behavior and Its Impact on Profit and Loss
Who is affecting the selling pressure?
The analysis above examined the different logics behind the selling behavior of this group of investors during periods of decreased total supply from long-term holders. Additionally, we can categorically examine which subset of holders, based on different coin age categories, has a significant impact on the changing selling pressure in the market.
Image 7: Coin Age Layering in Bitcoin Supply Market
To evaluate to what extent each subset of long-term holders is affecting Bitcoin spending in the market, we focus on the period when the Bitcoin spending in the market is at least one standard deviation higher than the annual average.
While each investor group may experience occasional bursts of spending, the frequency of high spending days sharply increases during the frenzy of a bull market. This indicates that during periods of rapid Bitcoin price increases, long-term holders tend to choose to cash out profits.
Image 8: Spending by Long-Term Holder Groups (Z-Score)
Considering that only 4%-8% of the daily on-chain transaction volume is related to long-term holder group, we will use another core on-chain metric (Realized Profit/Loss) to analyze their relative weight in the market supply side.
Image 9: Coin Age Layering of Bitcoin Market Spending (SVAB) (30-Day Moving Average)
The figure below shows the cumulative realized profit from long-term holders during the bull market. We find that the profit from long-term holders usually accounts for 20% to 40% of the total realized profit.
Furthermore, although the trading volume from long-term holders accounts for only 4% to 8% of the total daily trading volume, their profits can account for up to 40% of investor profits.
Image 10: Realized Profit in the Bull Market
Conclusion
Since early March, the market’s price trend has been mainly consolidating. Therefore, we have evaluated the current supply and demand situation in the market using the cost basis of both long-term and short-term holders.
Based on the changes in the cost basis of the subset of short-term investors, we have constructed a toolset to estimate the trend of capital inflows into the Bitcoin network. The results confirm that after the price surged to a historical high in March, there was a subsequent period of net outflow of capital (negative trend indicator).
We then further segmented the long-term holder group by holding time and categorized the different subsets of investor groups. The conclusion of this analysis shows that during the euphoric phase of a bull market, the frequency of high spending days sharply increases. Interestingly, although the trading volume from long-term holders accounts for only 4% to 8% of the total daily trading volume, this group’s profits can account for 40% of investor total profits.
