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Bitcoin’s recent struggle to reclaim levels above $90,000 has intensified concerns across the market, with analysts now warning that the ongoing correction may reflect deeper structural weakness rather than a brief pullback. After slipping sharply from the cycle peak near $120,000, the market has yet to show meaningful signs of renewed strength, leaving bullish traders in a defensive position.
Over the past week, Bitcoin has remained trapped below the $90,000 threshold, oscillating between failed attempts at recovery and renewed selling pressure. Sentiment has cooled quickly across both spot and derivatives markets, where reduced liquidity and declining open interest suggest traders are increasingly cautious. Just weeks ago, the narrative centered around Bitcoin pushing toward fresh all-time highs; now, many market observers are questioning whether the cycle may be transitioning into a bearish phase.
At the center of this shift lies one of the most significant developments of the year: a major distribution event among Bitcoin’s long-term holders (LTHs), a cohort historically known for buying during weakness and selling near cycle tops.
LTH Supply Drops to 13.6 Million BTC—A Level Not Seen Since Early 2023
According to prominent analyst Axel Adler, long-term holders have offloaded unprecedented amounts of Bitcoin over the past quarter. Data shows that LTHs reduced their positions by 1.57 million BTC as prices fell toward $80,000—marking the largest profit-taking event of the entire cycle.
This heavy distribution has driven LTH supply down to 13.6 million BTC, its lowest level since the beginning of the current bull market. Adler notes that such dramatic reductions tend to accompany exhaustion phases, where smart-money investors begin locking in gains before broader market sentiment catches up.
Adler’s analysis highlights that the 30-day Net Position Change, a key metric used to track LTH behavior, is now showing one of the deepest negative readings since the bull trend began. This mirrors major market inflection points, including the sell-offs following the March 2024 and October 2024 peaks.
The latest decline has been particularly aggressive. Between November 11 and November 25, long-term holders sold 803,399 BTC, averaging more than 53,000 BTC per day. Historically, such intense selling only appears near cycle tops or during transitions into prolonged consolidation phases.
Distribution Patterns Resemble Previous Cycle Endings
What concerns market analysts is not simply the size of the sell-off, but its combination with falling prices. Typically, long-term holders distribute into strength. However, Adler notes that the recent wave of selling has occurred as Bitcoin’s price has been declining, suggesting that experienced holders believe the current trend may not continue upward in the near term.
Charts shared by Adler reveal deep red bars on the Net Position Change metric—indicating rapid supply compression—while Bitcoin simultaneously slid from its October highs. This alignment has historically signaled a major shift in market dynamics and a possible early warning of cycle exhaustion.
Unless substantial new demand enters the market to absorb this volume, analysts caution that these distribution patterns could drag Bitcoin into a structurally weaker environment.
Bitcoin Attempts to Stabilize But Technical Indicators Remain Bearish
Despite the bearish undertone, Bitcoin has attempted to stabilize around the $86,800 range following its sharp correction from $120,000. On the daily chart, the market appears to be searching for a floor, but several critical indicators point toward continued downward momentum.
Bitcoin is now trading below the 50-day, 100-day, and 200-day moving averages, all of which have begun to slope downward. This alignment typically reinforces bearish market structure and suggests that short-term recoveries may be met with selling pressure.
The area near $85,000 has emerged as the key support zone. Analysts believe that if Bitcoin fails to hold this region, the market could face another wave of capitulation, exposing downside targets around $78,000 and potentially $72,000.
Adding to the concern is the shift in trading volume. The selloff from the $120,000 region was marked by high-volume breakdowns, consistent with forced liquidations and panic-driven selling. Conversely, the recent relief bounce has occurred on much lighter volume, indicating weak buyer conviction.
What Comes Next for Bitcoin?
The market now enters a pivotal phase. If Bitcoin can build a stable base above $85,000 and attract renewed inflows, it may avoid a deeper downturn. However, the actions of long-term holders signal the possibility of a shift from bullish continuation to broader cycle fatigue.
Whether this marks the start of a prolonged downtrend or a temporary reset will depend largely on how the market responds over the coming weeks—and whether new demand can counteract the significant sell-side pressure now in motion.
