Bitcoin’s Realized Dominance: Strong Hands Rise Amidst Weak Sell-Off

Bitcoin's price remains near its all-time high, but a significant shift is occurring in its realized dominance, a metric reflecting the proportion of Bitcoin held by short-term holders (STH) versus long-term holders (LTH). Data from CryptoQuant reveals a decline in STH realized cap to around 45%, indicating reduced activity from recent buyers. This suggests new Bitcoin is either being sold at a loss or transitioning into long-term holdings, easing short-term speculative pressure. Conversely, the LTH realized cap is rising, signifying that long-held coins are being moved at a profit, a typical occurrence in late-stage bull markets. This divergence highlights a supply transfer: newer investors struggle with profitability, while long-term holders consolidate control. This dynamic often precedes bullish reversals, as reduced selling pressure from STHs can pave the way for sustainable price increases, assuming renewed demand emerges. However, despite the positive LTH dominance, some on-chain indicators point to weakening demand. Bitcoin's apparent demand, a metric assessing if new buyer demand offsets selling from miners and LTHs, has dropped significantly to -37,000 BTC, signaling fading buying interest. This raises concerns about a potential short-term drawdown, potentially mirroring the April 2025 pullback. Despite this, the rising STH floor price, nearing $100,000, offers a positive sign. In essence, the market is consolidating, with weaker hands exiting and stronger holders gaining dominance. While this could lead to a more stable price base and potentially a new all-time high, the weakening demand warrants cautious optimism.

(Source: https://www.newsbtc.com/bitcoin-news/bitcoin-realized-dominance-signals-weak-hands-capitulating-strong-hands-rising/)