Analysis: Market decline combined with BTC Token distribution is not necessarily alarming; potential selling pressure is released in advance during the transition from a bear market to a bull market

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Analysis: Market decline combined with BTC Token distribution is not necessarily alarming; potential selling pressure is released in advance during the transition from a bear market to a bull market

BlockBeats news,October 12, analyst Murphy said that the data shows October 7 to 8 long-term holders (LTH) cumulatively transferred approximately 32000 BTC This was the February 5 th 2 largest daily LTH(long-term holder) transfer volume since the sharp market decline this year, most likely indicating a potential intention to sell. However, these 32000 BTC cannot all be regarded as active distribution by LTH.

During the same period, wallets associated with the U.S. government transferred approximately Coinbase Prime 17200 BTC. Given that Coinbase Prime is the official custody and trading service provider designated by the U.S. Marshals Service, this transfer does not necessarily indicate a sale and may instead be related to asset custody consolidation or case disposition. Excluding this special transfer, the remaining approximately 14800 are the potential selling pressure that warrants greater attention, mainly originating from long-term holdings with coin ages of 6-12 months and 3-5 years.

During the transition from a bear market to a bull market,LTH transfers an average of 2000-3000 BTC to trading platforms per day, which is generally within the normal range. Once transfer volume suddenly exceeds the average by a wide margin, it is often accompanied by special events or expectations that the market will be bearish. However, the combination of "market decline and LTH token distribution" is not necessarily a bad thing, especially during the transition from a bear market to a bull market. Looking at the adjusted CDD(coin days destroyed) data, whenever the market pulls back and CDD rises sharply, it often means that some long-dormant holdings are becoming active and may even be exiting. In hindsight, although the decline brought short-term selling pressure, it also prompted some less-committed holders to complete turnover. The advance release of potential selling pressure may instead reduce resistance for subsequent market moves.

From another perspective, this is also a sign that long-dormant holdings are gradually being activated and turnover activity is continuously increasing as the bull market progresses. Therefore, there is no need to be overly concerned about every instance of LTH distribution. What truly matters is whether the market can effectively absorb these holdings. After all, a bull market cannot consist solely of buying without any selling. The continued release of old holdings and the constant absorption by new capital are themselves part of the market's process of rediscovering value. Sufficient turnover of holdings is instead an important foundation for a market move to continue further.