Long-term holders gradually selling indicates bitcoin may be entering a consolidation phase: analysts

The bitcoin market may be entering a consolidation phase characterized by gradual selling from long-term holders, analysts claim.

"Long-term bitcoin holders and whales seem to be behind most of the recent bitcoin selling, both on exchange and also through OTC transactions," Bitfinex analysts said. "Historically, long-term holders tend to sell their holdings gradually during bull markets, and particularly when the market enters a consolidation phase — such as that which we are seeing currently."

The analysts highlighted the Bitfinex Hodler Net Position Change metric, which tracks whale holdings, revealing that large holders have consistently shown negative values for the past nine days. "Alongside the large-holder net position change, the bitcoin exchange whale ratio has continued to climb as more whales deposit balances on exchanges — these two entities command more bitcoin than the exchange-traded funds, and have clearly put pressure on the market," the Bitfinex analysts added.

Bitcoin BTC -0.65% decreased by around 1% in the past day and was changing hands for $65,150 at 7:42 a.m. ET., according to  The Block's Bitcoin Price Page . The entire cryptocurrency market capitalization has experienced a decline in the past 24 hours, falling in value by 2.1% to now stand at $2.48 trillion, according to Coingecko data .

Equity markets buoyant despite hawkish Fed

In contrast to the downside pressure seen in crypto, U.S. equity markets have been buoyant, despite the Federal Reserve's renewed caution when discussing the commencement a rate cutting cycle this year. 

"There’s not much downside in equity markets at the moment," deVere Group CEO Nigel Green said in a note sent to The Block.

Green noted that the S&P 500 has reached its 30th all-time high this year, driven primarily by robust performances in the tech sector. The S&P 500 closed up 41.63 points at the end of yesterday's session, now at 5,473.23 points, an increase of 0.77% in the day's trading.

"This rally has not been confined to the U.S., as Asian and European markets have also posted significant gains, buoyed by strong investor confidence and positive sentiment. Investors are increasingly making decisions based on the solid fundamentals of companies, particularly those in tech," 

Green added that tech giants are well-positioned to continue delivering profits. "Their business models are built on innovation, scalability, and global reach, which provide a buffer against potential downturns," he added.