Bitcoin (BTC) Faces Downward Pressure Amid Long-Term Holder Distribution

Bitcoin’s (BTC) Recent Market Activity Signals a Challenging Phase

Bitcoin is currently facing a difficult period as it struggles to hold key cost-basis levels, according to data from Glassnode. Persistent selling pressure from long-term holders is impacting the cryptocurrency’s ability to sustain upward momentum, raising concerns about its near-term outlook.

### Market Struggles with Key Levels

Bitcoin’s price has been unable to maintain levels above the short-term holders’ cost basis of approximately $113,000. This threshold is critical as it often represents the balance between bullish and bearish momentum. The failure to reclaim and hold this level increases the risk of a deeper retracement towards the Active Investors’ Realized Price, which is around $88,000.

This struggle is further compounded by ongoing distribution from long-term holders, who are offloading roughly 104,000 BTC each month. This selling pattern echoes previous market cycles where significant long-term holder selling marked phases of demand exhaustion.

### Volatility and Options Market Dynamics

Following October’s market crash, implied volatility has cooled off, but the options market remains in a delicate position. Upcoming decisions from the Federal Reserve are expected to play a significant role in shaping market dynamics. A hawkish surprise from the Fed could spark renewed volatility, while a dovish stance might help sustain the current stability.

Implied volatility has eased, and skew has reset lower, signifying a shift away from extreme demand for downside protection toward a more balanced outlook. Traders appear cautiously optimistic: selective upside positioning at certain strike prices suggests expectations of a moderate rally rather than an aggressive breakout.

### Long-Term Holders and Market Sentiment

The continued distribution by long-term holders highlights a phase of demand exhaustion. The net position change for these holders has reached significant levels, reflecting widespread profit-taking amid weakening demand.

Historically, strong market expansions have followed when long-term holders transition from distribution to accumulation. Currently, the volume of Bitcoin transferring from long-term holders to exchanges has surged, indicating persistent sell-side pressure. This elevated activity mirrors past periods where heavy long-term holder spending suppressed price momentum.

### Outlook and Federal Reserve’s Influence

As Bitcoin navigates this period of recalibration, focus shifts to the Federal Reserve’s upcoming actions. Their decisions could substantially influence market volatility in the near term.

For now, the market’s relative calm remains conditional. Renewed volatility is possible depending on external economic developments and the behavior of long-term holders. Until these holders shift back toward accumulation, Bitcoin’s upside potential may remain constrained.

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