Bitcoin’s continued price movements have led to intense analysis as it continues to hover below the $100,000 mark. Despite hitting an all-time high above $108,000 last week, the cryptocurrency has struggled to maintain its upward momentum since then.
With this achievement, BTC’s on-chain data has been spotlighted to reveal the factors driving recent selling pressure and investor behavior. A key focus was the Spent Output Age Bands (SOAB) indicator, which provides valuable insights into the activity of Bitcoin holders based on their holding periods.
Who Cashed Out Their Bitcoin Winnings?
According to a CryptoQuant analyst known as Yonsei Dent, facts reveals that Bitcoin investors who purchased their holdings between six to 12 months ago were the most active sellers during the recent price surge.
This group entered the market largely during the initial excitement surrounding the launch of spot Bitcoin Exchange-Traded Funds (ETFs) earlier this year. Although this selling activity has put downward pressure on Bitcoin’s price, the asset has managed to stabilize within the $90,000-$100,000 range.
Interestingly, long-term holders, defined as those who have held Bitcoin for more than a year, have shown minimal selling activity. Historical trends show that these seasoned investors are likely anticipating higher price levels before considering substantial profit-taking.
Meanwhile, Dent pointed to the Binary Coin Days Destroyed (CDD) metric showing a noticeable drop in the number of older Bitcoin being moved in December compared to November. Historically, reduced activity from long-term holders during price corrections often signals market resilience and potential for future upside momentum.
The analyst wrote:
The ‘Binary CDD’ indicator at the bottom of the chart shows a decline in sales of older Bitcoin in December compared to November. This suggests that many long-term owners may expect even higher prices before selling.
Binance reserves indicate market confidence
Speaking of higher prices, another crucial metric that suggests a major move for Bitcoin is coming comes from Binance’s Bitcoin reserves, which have been steadily declining since August.
CryptoQuant analyst Darkfost marked that Binance’s reserves recently hit their lowest level since January. This trend is significant because a similar decline earlier this year preceded a 90% increase in Bitcoin’s price.
The decline in foreign exchange reserves generally indicates that investors are moving their Bitcoin holdings away from centralized exchanges and into private portfolios.
Such behavior indicates reduced selling pressure and a preference for long-term investment strategies. Historically, declining reserves on the stock exchanges have often accompanied periods of strong market optimism and price increases.
Particularly as BTC is still currently trading at a price of $95,567, which is down 2.7% over the past day, the confluence of these factors – long-term shareholder confidence, reduced activity from legacy wallets and declining foreign exchange reserves – a cautiously optimistic view for the future. Bitcoin’s short-term trajectory.
However, it warns that continued buying activity will be necessary to break psychological resistance levels and maintain upward momentum.
Featured image created with DALL-E, Chart from TradingView
