If October’s crash was about forced selling, the current drawdown may reflect something more sobering: conviction eroding. Long-time Bitcoin holders have offloaded around 400,000 Bitcoin over the past month, an exodus of about $45 billion that’s left the market unbalanced, according to Markus Thielen, head of 10x Research.“Over 319,000 Bitcoin has been reactivated in the past month, mainly from coins held for six to twelve months — suggesting significant profit-taking since mid-July,” said Vetle Lunde, head of research at K33. “While some reactivation stems from internal transfers, much reflects real selling.”Unlike the cascading wipeouts that triggered the October swoon, the current slide has been led by a steady drumbeat of selling in the spot market. That marks a shift from the pattern crypto traders have come to expect lately, where sudden bursts of volatility are typically driven by liquidations in futures markets.
Roughly $2 billion in crypto positions were liquidated over the past 24 hours, according to CoinGlass—modest compared to the $19 billion in forced unwindings that punctuated last month’s crash. Open interest in Bitcoin futures remains subdued, and options traders have been placing downside bets through put contracts targeting the $80,000 level.With leverage relatively mu-ted, attention has turned to the long-time holders who are choosing to sell.According to Thielen, a growing imbalance between long-time holders unloading Bitcoin and new buyers stepping in is beginning to shape market direction and not just sentiment. Earlier this year, Thielen observed that “mega whales”—entities holding between 1,000 Bitcoin and 10,000 Bitcoin—began offloading large volumes, even as institutional players tried to absorb the supply. That helped explain Bitcoin’s choppy, sideways movement during the summer. But since the October 10 crash, Thielen says, broader demand has faded. “We broke through some on-chain indicators — people are underwater, they need to close their positions,” he said.All told, accumulation by parties holding between 100 Bitcoin and 1,000 Bitcoin has dropped sharply. “The whales are just not buying,” he said.
Looking ahead, Thielen warns the unwind could last well into next spring. In the 2021–2022 bear market, more than one million Bitcoin were sold by large holders over almost a year — a scale Thielen believes may repeat. “If this is asimilar pace,” he said, “we could see this situation going on for another six months.”
