Recent data initially suggested a concerning trend of Bitcoin's long-term holders offloading substantial amounts, sparking worries across the market. However, a deeper dive into the numbers reveals a far less dramatic picture, with analysts now pointing to a significant technical distortion behind the perceived sell-off.
Debunking the "LTH Selling" Narrative
What first appeared as heavy selling pressure from Bitcoin's most steadfast investors, the long-term holders (LTHs), has largely been re-evaluated. Initial reports showing a surge in LTH selling activity led to speculation about Bitcoin's stability. Yet, expert analysis indicates that these figures were skewed, suggesting the narrative of a mass exodus by seasoned holders is fundamentally flawed and overstated.
The Technical Distortion Explained
The root cause of this misinterpretation stems from a massive internal transaction. In late November, cryptocurrency exchange Coinbase moved nearly 800,000 BTC when the asset was trading around $85,000. This internal transfer effectively "destroyed" old long-term holder Unspent Transaction Outputs (UTXOs) and simultaneously created new ones. This technical process artificially inflated the metrics used to track LTH selling, thereby presenting a misleading impression of widespread liquidation by long-term investors.
