Bitcoin is facing significant downward pressure as its most steadfast investors continue to liquidate their holdings, creating a sustained sell-off that the market is struggling to absorb. This silent exodus from long-term holders is a key factor behind the leading cryptocurrency's struggle to find a stable footing.
The Scale of the Sell-Off
More than two months after reaching an all-time high above US$126,000, Bitcoin has fallen nearly 30 per cent. New blockchain data reveals that coins held for years are being divested at some of the fastest rates observed in recent years. According to a report from K33 Research, the amount of Bitcoin that had remained unmoved for at least two years has declined by a staggering 1.6 million coins since early 2023. This represents roughly US$140 billion worth of value exiting long-term storage.
The trend has accelerated in 2025. Analytics firm CryptoQuant reported that nearly US$300 billion worth of Bitcoin, which had been dormant for over a year, has re-entered circulation. The past 30 days alone have seen one of the heaviest distributions by long-term holders in more than five years.
A Market Struggling to Absorb Supply
Chris Newhouse, Director of Research at decentralized finance firm Ergonia, described the situation as a "slow bleed." He noted it is characterized by steady spot selling into thin bid liquidity, creating a grinding decline that is harder to reverse than sudden, leverage-driven crashes.
For much of the past year, robust demand from newly launched U.S. spot Bitcoin exchange-traded funds (ETFs) and institutional investment firms easily absorbed this selling pressure. However, that dynamic has shifted. ETF flows have turned negative, derivatives trading volumes have dropped, and retail participation has thinned. The market now has fewer active buyers to meet the consistent supply from long-term holders.
Catalysts and Current Trading
The pressure intensified after October 10, 2025, when US$19 billion in crypto liquidations were triggered by unexpected comments on tariffs from former U.S. President Donald Trump. That event marked the biggest single-day leverage washout in cryptocurrency history, and traders have largely retreated from derivatives markets since.
Some industry executives view the selling as a natural consequence of monumental gains. Hassan Ahmed, head of Coinbase Global Inc.'s Singapore operations, told Bloomberg TV that when investors are sitting on profits of 1,000x to 10,000x, it is normal to see some distribution.
After a brief jump to US$90,000 on Wednesday—attributed to short liquidations—Bitcoin quickly resumed its decline. It fell as much as 2.8 per cent to US$85,278, hovering near the lower end of its trading range since the October crash. As of 9:30 a.m. London time on Thursday, December 18, it was trading just below US$87,000.
Vetle Lunde, a Senior Analyst at K33, provided crucial context. He stated that unlike prior market cycles, these reactivations of old coins are not driven by altcoin trading or protocol rewards. Instead, they are enabled by the deep liquidity from U.S. ETFs, allowing early adopters—often called "OG" or original gangster holders—to realize profits at historically high prices. Lunde noted that the sell-offs in 2024 and 2025 represent the second and third-largest long-term holder supply reactivations in Bitcoin's history, surpassed only by the distribution seen in 2017.
