Bitcoin's Long-Term Holders Drive Market Amid Pullbacks

Bitcoin's Long-Term Holders Influence Market Amid Recent Pullbacks

Bitcoin (BTC) has experienced a slight pullback, dropping by 0.66% in the last 24 hours, despite a nearly two-week uptrend that saw the cryptocurrency reach a new high of $109,000 four days ago. At the time of writing, BTC was trading at $104,337 after a minor decline on the daily timeframe, but the uptrend remained intact.

The consistent momentum of BTC can be attributed to the behavior of long-term holders (LTHs), who have been particularly bullish for the year ahead. According to CryptoQuant, the cryptocurrency is now facing a fierce battle between diamond hands and speculative FOMO, with LTHs' supply dominance remaining high, signaling strong long-term conviction.

LTHs have been accumulating BTC when the price drops and taking profits strategically when the price surges, supporting a bullish long-term outlook by limiting market selling pressure. In contrast, short-term holders (STHs) have seen a hike in activity during price rallies, indicating speculative interest and FOMO-driven entries, but significant distribution whenever the price drops, contributing to short-term volatility.

With LTHs having a significant share of the supply, it seems that Bitcoin's market has now matured. The falling influence of STHs on supply can reinforce market stability, although their speculative behavior might still drive short-term price swings. This combination positions Bitcoin for a bullish outlook throughout 2025, with strategic profit-taking by LTHs potentially spurring healthy pullbacks and offering opportunities for new accumulation.

While the analysis provided above offers a promising outlook, it's essential to counter-check other market indicators to determine their implications. For starters, Bitcoin's fund flow ratio has risen over the past week from 0.05 to 0.11, implying that more capital may be flowing into BTC than leaving, suggesting accumulation behavior. Additionally, Bitcoin's SOPR declined from 1.05 to 1.01, indicating that with BTC trading sideways, holders have been reluctant to sell, resulting in supply scarcity and potential price appreciation.

The scarcity can be confirmed by the rising stock-to-flow ratio, which spiked from 124