Bitcoin Price Poised for 72% Rally as 80% Held by Long-Term Investors

Bitcoin (BTC) has historically shown significant price rallies when the supply held by long-term holders (LTHs) exceeds 80%. This pattern is currently repeating, with over 80% of all Bitcoin being held by LTHs, indicating a potential for another substantial price increase.

Analysts have noted that when the majority of Bitcoin's supply is held by LTHs, any new demand can drive the price up aggressively. This is because LTHs are less likely to sell their holdings, creating a supply shock that can amplify price movements.

Historically, this scenario has played out twice before. In February 2024 and October 2024, when the supply held by LTHs exceeded 80%, Bitcoin's price rallied by 72% and 84%, respectively. These rallies were driven by the reduced sell pressure and increased demand for Bitcoin.

Currently, the total supply held by LTHs has reached an all-time high of 14.7 million BTC, worth approximately $1.6 trillion. This trend, combined with steady purchasing from institutional investors, suggests that a high percentage of Bitcoin's supply is becoming illiquid. This illiquidity can amplify Bitcoin's potential to surge higher when demand increases.

Bitcoin traders are positioning for a rise to $130,000, as evidenced by their growing positions in September $130,000 call options. These call options signal expectations of bullish volatility, with traders anticipating Bitcoin's potential breakout from the current $100,000–$110,000 range. A decisive breach of the $110,000 resistance could spark renewed volatility, with some larger players positioning for just that.

The BTC/USDT three-month liquidation heatmap shows significant liquidity clusters just above $110,000, with heavy ask orders sitting around $122,000 up to $130,000. This indicates that traders are anticipating a potential breakout and are positioning themselves accordingly.

In summary, the current trend of over 80% of Bitcoin being held by LTHs, coupled with historical data and trader positioning, suggests a potential for a significant price rally. This scenario has played out twice before, with Bitcoin's price gaining 72% and 84% in the previous instances. The reduced sell pressure and increased demand for Bitcoin, along with the illiquidity of a high percentage of its supply, could drive the price higher in the coming months.