In the recent session, Bitcoin showed mixed price movements with significant volatility and unstable rebound attempts. BTC rebounded after a short-term decline, but momentum remains weak.
The weakening confidence of one of Bitcoin's most influential investor groups could make it difficult to sustain broader price recovery efforts.
Bitcoin holders witness a decrease in profits
Long-term Bitcoin holders have increased selling activity in recent days. According to on-chain data, the 30-day change rate of long-term holder supply has dropped to its lowest level in 20 months.
A similar level was last recorded in April 2024, suggesting that distribution pressure has increased.
This movement indicates that long-term holders are reducing their holdings to protect remaining profits. As unrealized profits decrease, selling to avoid losses accelerates. Such behavior often burdens price recovery unless new demand increases.
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Macroeconomic indicators provide additional context. The long-term holder net unrealized profit/loss indicator has fallen to a monthly low. This shows that the profits of this group are decreasing, making them more sensitive to declines.
Historically, when the long-term holder NUPL metric decreases, there tends to be defensive selling. However, this indicator often leads to gradually decreasing selling pressure when it falls further.
During such periods, long-term holders typically stop distributing, and if Bitcoin prices stabilize and demand increases, there is a possibility of a rebound.
At the time of writing, Bitcoin is trading around $87,900 and is staying below the resistance level of $88,210. Recently, the price dipped briefly below the support level of $86,247 before rebounding. This shows that buying pressure is coming in even during the decline, but investors' confidence is not strong.
In the short term, there is a slight possibility of rising to $90,308. However, resistance in that vicinity could limit further gains. Considering the sustained selling by long-term holders, Bitcoin may consolidate around $88,201 while the market digests additional supply.
If long-term holders change their attitude, the possibility of a rise increases. If selling pressure slows down, the pressure of available supply decreases.
If this situation unfolds, Bitcoin could break through $90,308 and target $92,933. Such a movement would negate the bearish scenario and signal that confidence among major market participants has increased again.
