Bitcoin's Long-Term Holders Cash Out 70% During March Rebound

On April 4th, on-chain data analyst Murphy shared insights on social media regarding the behavior of Bitcoin (BTC) holders during market pullbacks. Typically, during a bull market pullback, BTC's price repeatedly tests the Short-Term Holder Realized Price Cost (STH-RPC), currently at $93,000. However, since February this year, BTC has not experienced a significant rebound.

Between November 2024 and January 2025, the total realized value in the market saw STH profit realization account for 56%, while Long-Term Holder (LTH) profit realization accounted for 42%. This indicated that during this period, both short-term and long-term holders had substantial profit margins and were actively cashing out. During the rebound from March 13th to March 25th, LTH profit realization reached 70%, while STH was only at 10%. This suggests that the cash-out behavior during this rebound was primarily driven by long-term holders, as short-term holders had limited profit margins left.

Historically, whether in a deep bear market or a bull market pullback, a phase-wise bottom is formed after LTHs gradually turn into a loss-making state. This phase often marks the bottom of a long cycle because when there is nothing left to sell, it forms a bottom. The nearest long-term holder's cost base to the current price is around $81,000, and this group holds roughly over 300,000 BTC. This means that when the BTC price falls below $80,000, the BTC held by these LTHs will be in a loss-making state, providing strong support at this price level.

Over time, as more high-level trapped short-term chips passively become long-term chips, the overall LTH cost basis will be raised. This effect will continue until the "issue" of trapped short-term chips is effectively resolved, keeping the market in a framework of "looking for rebounds and not for reversals."