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Bitcoin (BTC) long-term holders continued to reduce their BTC exposure as their holdings fell to the lowest levels since April.

Key takeaways:

Bitcoin long-term holders reduced their supply to 72%, the lowest since April

BTC price is at risk of a deeper correction to $68,500 if key support levels fail.

Bitcoin long-term holder supply falls to April levels

Long-term holders (LTHs), entities that have held Bitcoin for at least 155 days, have reduced their holdings to 14.3 million BTC in December from 14.8 million BTC in mid-July, according to data from Glassnode. 

This has reduced the percentage of supply held by these investors to 71.92%, a level last seen in April, as shown in the chart below.

Related: Bitcoin sharks stack at the fastest pace in 13 years, with BTC down 30%

The April figures came as Bitcoin dropped from its Jan. 20 all-time high of $109,000, bottoming at $74,000. LTHs took advantage of the low prices and increased their supply to 76% in July, resulting in a 65% rally in Bitcoin’s price to its previous record highs of $123,000 reached on July 14.

If a similar scenario unfolds, LTHs could see the latest BTC price drop to $84,000 as an opportunity to add to their holdings, sparking a recovery to new all-time highs over the next few months.

Bitcoin long-term holder supply, %. Source: Capriole Investments

Zooming out, LTH supply typically sees sharp declines during the retail-driven phases and selling by LTHs that accompany cycle peaks, as seen in 2017 and 2021.

Analyzing the LTH supply change, data from CryptoQuant reveals that on a rolling 30-day basis, the supply had dropped by 1.1 million BTC on Nov. 26, the second-largest on record. 

As of Dec. 15, the LTH supply has decreased by 761,000 coins over the past 30 days, suggesting that these investors are capitulating as fears of deeper price drops mount.

Bitcoin 30-day rolling LTH supply change. Source: CryptoQuant

As Cointelegraph reported, whales sold $2.78 billion in BTC over the last 30 days, keeping downside pressure firmly in place. 

Can BTC price avoid a trip below $70,000?

Bitcoin’s technical structure weakened after it lost support from the 50-week moving average (MA) and the yearly open at $93,300.

The chart below shows that the BTC/USD pair validated a bear flag when it dropped below the lower boundary of the flag at $92,000 on Dec. 12. 

The first area of interest now lies between the $83,800 local low (reached on Dec. 1) and the multimonth low of $80,500, reached on Nov. 21.

Losing this support zone would open the door for a deeper correction toward the measured target of the flag at $68,500, supported by the 200-week MA. Such a move would represent a 20% drawdown from the current price.

BTC/USD daily chart. Source: Cointelegraph/TradingView

“BTC broke down again, confirming the bearish flag,” said analyst Nic in an X post on Tuesday, adding that the next “potential support” is the 100-week EMA at $85,500.

“If we break that, there are key onchain levels such as $83.8K (ETF cost basis) and the $81.2K (true market mean),” before $80,000 comes to the picture, the analyst added.

As Cointelegraph reported, the 20-day EMA has begun to turn down, and the RSI is in negative territory, indicating that bears are in control.

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