Recent Bitcoin market data reveals a split between retail investors selling at losses and long-term holders staying inactive. Analysts suggest this dynamic could reduce available supply on exchanges, potentially tightening market conditions. The cryptocurrency’s price held above $70,000 despite recent geopolitical tensions.
Bitcoin is trading near the $70,000 mark, with on-chain data showing a widening gap between retail investors dumping their holdings and long-term holders staying completely still. That split is drawing attention from analysts who say the pattern could be setting up conditions for a supply squeeze.
According to analyst GugaOnChain, since the start of the year, Bitcoin exchange reserves have dropped by around 204,000 BTC. This means that fewer units are available on exchanges for selling, even with short-term holders offloading their stash. The analyst mentioned that a metric tracking whether recent buyers are gaining or losing when they sell is at 0.97, indicating many are selling at a loss.
Meanwhile, long-term whales are not moving, with GugaOnChain pointing out that older coins have not been touched. Selling pressure at this stage is “purely emotional,” driven mostly by newer traders who bought their BTC at higher prices and are now cutting losses. A market update from fellow CryptoQuant contributor burakkesmeci added that Bitcoin whales who have held for less than 155 days are sitting on an average cost basis of about $85,600.
According to the analyst, Bitcoin’s bull cycles have only resumed once the price reclaims and holds above this group’s cost basis. “Looking at Bitcoin’s cycles, the pattern is consistent,” they wrote. “When price falls below the STH whale cost basis, bear season begins — when price reclaims and holds above it, bull season follows.” That level was tested in January but held as resistance and subsequently pushed BTC down.
Last weekend gave the market an unexpected data point when oil prices jumped sharply, but Bitcoin held above $70,000. Fundstrat’s Tom Lee said it was a sign that Bitcoin was “coming back in vogue as a store of value.” That argument got a brief test when the cryptocurrency whipsawed after U.S. President Donald Trump claimed there was “nothing left to target” in Iran. Within minutes, his comment added nearly $2,000 to BTC’s price, even though it later retreated.
