Long-Term Bitcoin Holders Are Selling — and the Market Is Feeling It

Bitcoin is facing renewed downside pressure as its most established investors continue to cash out, adding strain to an already fragile market.

More than two months after Bitcoin surged to a record high above $126,000, the cryptocurrency has fallen nearly 30% and is struggling to establish strong support levels. A key driver behind the decline is persistent selling by long-term holders — investors who have held Bitcoin for years and are now steadily exiting positions.

According to a report by K33 Research, the amount of Bitcoin that had remained unmoved for at least two years has declined by approximately 1.6 million coins since early 2023, equivalent to roughly $140 billion at current prices. The data points to sustained distribution from long-standing holders rather than short-term speculative selling.

Dormant Bitcoin Supply Returns to the Market

In 2025 alone, nearly $300 billion worth of Bitcoin that had been dormant for more than a year has re-entered circulation, according to Bloomberg. Blockchain analytics firm CryptoQuant reported that the past 30 days marked one of the heaviest long-term holder distribution periods in over five years.

“The market is experiencing a slow bleed characterized by steady spot selling into thin bid liquidity, creating a grinding decline that’s harder to reverse than leverage-driven capitulation events,” said Chris Newhouse, director of research at Ergonia, a decentralized finance research firm.

For much of the past year, selling pressure from long-term holders was absorbed by strong demand from newly launched Bitcoin exchange-traded funds (ETFs) and crypto-focused investment firms. However, that support has weakened. ETF flows have turned negative, derivatives trading volumes have fallen sharply, and retail investor participation has declined. As a result, the same volume of Bitcoin supply is now hitting a market with fewer active buyers.

October Liquidations Weigh on Market Confidence

Selling pressure intensified following a major market shock on Oct. 10, when $19 billion in liquidations were recorded after unexpected comments from U.S. President Donald Trump regarding punitive tariffs. The event marked the largest single-day leverage washout in crypto history and prompted traders to retreat from derivatives markets.

After a brief rally on Wednesday that pushed Bitcoin toward $90,000 — largely driven by short-position liquidations — prices quickly resumed their downward trend. Bitcoin fell as much as 2.8% to $85,278 and was trading just above $86,000 at the time of writing.

Open interest for Bitcoin options and perpetual futures remains well below levels seen before the October crash, according to data from Coinglass. The decline suggests that many traders remain on the sidelines, particularly as derivatives markets account for the majority of crypto trading activity. Meanwhile, the popular basis trade — which exploits price differences between spot and futures markets — has become unprofitable for hedge funds.

OG Investors Reduce Concentration as Institutional Demand Evolves

“Unlike prior cycles, these reactivations are not driven by altcoin trading or protocol incentives, but by deep liquidity from US ETFs and treasury demand, enabling OG holders to realize profits at six-digit prices and materially reducing ownership concentration,” said K33 Senior Analyst Vetle Lunde, using the term “OG” to describe early Bitcoin adopters, as reported by Bloomberg.

Lunde noted that the scale of reactivated supply over the past two years ranks among the largest in Bitcoin’s history. The current cycle represents the second- and third-largest long-term supply reactivations ever recorded, surpassed only by the 2017 bull market.

Despite the ongoing selling, Lunde suggested that distribution by long-term holders may be nearing its peak.

“Looking ahead, the sell-side pressure from long-term holders appears closer to saturation, with around 20% of BTC supply reactivated over the past two years,” Lunde wrote. “The expectation is for OG selling to subside in 2026, allowing two-year supply to rise as BTC transitions toward net buy-side demand amid deeper institutional integration.”