On-chain data shows the Bitcoin long-term holders locked in a significant amount of gain around the time of the latest price plunge.
This cohort is considered to represent the HODLers of the market, who rarely sell even in the face of volatility. That said, there are times when these investors do participate in selloffs, and one such instance seems to have occurred just recently.
Below is the chart shared by Martinez that shows the trend in the Bitcoin Realized Profit for the LTH whales over the last few weeks.
The Realized Profit here is naturally an on-chain indicator that measures the total amount of profit that the Bitcoin LTH whales are locking in through their transactions. From the graph, it’s visible that this metric observed a notable spike on September 21st.
This was the day BTC started a price drawdown that took it to the $112,000 level. Thus, it would appear possible that the profit-taking from the HODLers may have in part been to blame for the bearish action.
As displayed in the above chart, Bitcoin STHs sent 15,700 BTC at a loss to exchanges during the price crash. Investors generally use these platforms when they want to sell, so these loss transactions could have been a sign of capitulation from the cohort.
The STHs have a relatively short holding time, so they are assumed to include the weak hands of the sector. In that view, the latest capitulation would be on-brand for the group.
The cumulative Bitcoin LTH Realized Profit sits at 3.4 million BTC for the current bull market, which is higher than all, but one previous cycle.
Bitcoin has made some recovery during the past day as its price has returned to $113,700.
