There are certain types of Bitcoin holders who only show up when the noise gets louder.
These are the people who watched 2021 melt into 2022 and learned to hold on to the keys anyway and live with the idea that the line on the chart can fall faster than they feel like it. When prices go up, they are treated like prophets. When prices roll over, they are treated like the bad guys.
In recent weeks, there has been talk of villains all over the place, long-term holders selling out, old stocks cashing in, and the cycle coming to an end. This story makes emotional sense. It gives a clear reason for the confused market.
The problem is that chains rarely give clear answers, especially when large custodians are moving funds.
On-chain analysts like Darkfrost are focusing on “changes in LTH supply,” which is essentially a way to track whether a coin that has been stationary for months is starting to move.
When we saw the little green candles for the first time since mid-July, they saw that the dump was nearing its end. CryptoQuant founder Ki Young Ju highlighted the end of long-term holder selling pressure on X, but can we be sure?
Coinbase's giant shuffle leaves your data scary
In late November, Coinbase moved large amounts of cryptocurrencies between internal wallets as part of a planned migration. Coinbase said the transfers were planned, unrelated to the breach, intended to rotate legacy internal wallets to new ones as a security best practice, and would not impact customer deposits or product uptime.
This is important because internal wallet migrations will look like real on-chain sales, coins will move, ages will be reset, dashboards will light up, and people will start drawing conclusions.
This is a move that does not involve a change in ownership.
So when analysts say they have “fixed” the long-term holder data by isolating the Coinbase effect, they are essentially trying to remove a huge operational imprint from the chart.
What are the signals from long-term holders saying now?
The most notable takeaway from the floating adjusted chart is simple. It appears that long-term holders are releasing the sell button, meaning the volatility is small.
This is consistent with the broader idea that the market is trying to find a bottom, but confirmation remains thin. Even Glassnode uses an entity-adjusted cohort model and uses a ~155-day threshold to define long-term holders, but its Week On-Chain report “Lacking Conviction” describes long-term holders as “heavy net distributors” of approximately 104,000 BTC per month in late October.
The report also notes that in the heat of drawdowns traders are forgetting an important point: Great expansions in Bitcoin's history tend to begin after long-term holders move from circulation to sustained accumulation, a regime change that takes time to prove itself.
Glassnode's definition and methodology are important here as well. Their documentation explains that the LTH, STH split is centered around 155 days, and that the metric suite is entity-adjusted rather than raw address counts.
So the best way to read today's “LTH discontinuation” story is as an early nudge, not a victory lap.
Even if long-term holders relax, ETF flows could still fluctuate week-to-week
A second reality now exists above on-chain behavior, with ETFs turning Bitcoin into something more like an everyday mood ring for risk appetite.
A single big day for an ETF can also trivialize modest changes in the behavior of long-term holders. This includes the daily outflow of approximately $523 million from BlackRock's iShares Bitcoin Trust (IBIT) in November.
These flows are not the same as old holders selling their coins, but they land on the same market at the same time and on the same order book. That's why Bitcoin trades like a stressed tech stock, even though it feels calm on-chain.
Macro background is changing, but not yet in “easy mode”
Bitcoin’s biggest rallies tend to occur when liquidity is rising and buyers feel safe taking risks. That's why the Federal Reserve keeps coming up in cryptocurrency conversations, even though no one wants it to.
The Fed lowered its target range by 25 basis points in December to 3.5% to 3.75%. Around the same time, the New York Fed announced it would begin purchasing Treasury bills under its reserve management program, with an initial schedule totaling about $40 billion, with purchases to begin on December 12.
These are plumbing issues that help explain why risk markets remain stable even when sentiment deteriorates, and why the coming months could depend on whether buyers consistently exit.
Three paths from here, and what supports each one.
- A true reset and recovery.
Selling among long-term holders continues to wane. This continues for a few weeks, as ETF flows stop bleeding and turn from mixed to positive, and volatility declines. In such environments, Bitcoin often does what it does best: bore people first and then move on. - There is a wide range of frustration.
Long-term holders sell less, but they don't accumulate in a sustainable way. ETFs remain volatile, and macro headlines continue to change the mood of the market. This is a result of Bitcoin spending more time rebuilding trust than breaking records. - As distribution returns, the market's patience will be tested once again.
Prices could remain under pressure if the distribution of long-term holders increases again and we expect large outflows from ETFs again. Glassnode's Week On-chain perspective points out key cost benchmark levels and highlights how indirect supply can dampen the rally when confidence is low.
the human part of the chart
For those who have lived through multiple administrations, the most significant change is rarely a one-day candle. This is the moment when the urge to sell fades and the urge to wait returns.
If long-term holders really withdraw from circulation, the market will become a little less vulnerable. It doesn't guarantee a price increase next week, it doesn't protect anyone from macro shocks, it doesn't erase the power of ETF flows.
It does something quieter.
That changes who becomes the marginal seller. In Bitcoin, it's often the beginning of the next chapter.
