Bitcoin has continued to capture headlines with its remarkable rally, pushing through new all-time highs despite a surge in selling activity by long-term holders. At the time of writing, Bitcoin (BTC) trades at $97,350 with a market cap of $1.92 trillion. Since the start of Q4, it has gained a remarkable 52%, leaving many wondering what’s behind its resilience.

While long-term Bitcoin holders—investors who traditionally hold for years—have been offloading significant amounts of BTC, the market has shown remarkable stability. Institutional interest through spot Bitcoin exchange-traded funds (ETFs) appears to be a key factor keeping Bitcoin’s momentum intact, absorbing much of the selling pressure.

Why Are Long-Term Holders Selling Now?

Historically, long-term holders tend to sell during price peaks, securing profits and waiting for opportunities to reaccumulate during downturns. This pattern is playing out again. According to recent on-chain data, long-term holders collectively control 14 million BTC. Yet, over the past two weeks, these holders have sold over 200,000 BTC after Bitcoin crossed the $75,000 threshold.

Despite this, analysts note that the current profit-taking isn’t driven by greed. Glassnode, a blockchain analytics firm, revealed that the Net Unrealized Profit/Loss (NUPL) for these holders is at 0.75, which indicates significant profitability but falls short of the euphoric “greed phase.”

While their activity could potentially dampen Bitcoin’s rally, the market’s response has been robust.

Spot Bitcoin ETFs Absorbing Selling Pressure

One of the key reasons Bitcoin remains resilient amid these sell-offs is the influx of institutional capital. Spot Bitcoin ETFs, which allow institutions and retail investors to trade BTC directly without holding the asset, have emerged as critical players.

In recent weeks, spot Bitcoin ETFs have seen weekly inflows ranging between $1 billion and $2 billion, according to data from market tracker So Value. Between October 8 and November 13, these ETFs absorbed 93% of the Bitcoin sold by long-term holders.

This massive demand has kept prices stable, even as selling pressure mounted. However, recent reports suggest that long-term holders’ selling activity is now outpacing ETF inflows, raising concerns about potential price volatility if this trend continues.

What About Short-Term Traders?

While long-term holders have been selling, short-term Bitcoin investors are showing restraint. Data from CryptoQuant highlights a rise in the Spent Output Profit Ratio (SOPR) for short-term traders, which now sits at 1.03. This means these traders are cashing out with a modest 3% profit on average.

The restrained behavior of short-term holders could be linked to market sentiment. With extreme greed dominating the market, many traders appear to be holding onto their BTC in anticipation of even higher prices. This could act as a stabilizing factor in the short term.

Betting Against Bitcoin: The Rise of Short Sellers

Interestingly, as Bitcoin approaches the $100,000 mark, short sellers are re-entering the market. Data from Coinglass shows that 61% of traders on Binance have opened short positions, betting on a price correction.

This marks the highest percentage of short positions in over a week and reflects skepticism about Bitcoin’s ability to surpass the $100,000 resistance level. However, if BTC does break through this psychological barrier, it could trigger a short squeeze—a scenario where short sellers are forced to buy back their positions, driving prices even higher.

Can Bitcoin Sustain Its Rally?

The interplay of institutional demand, profit-taking by long-term holders, and cautious optimism among short-term traders makes Bitcoin’s current rally a complex phenomenon. Spot Bitcoin ETFs have played a pivotal role in absorbing sell-side pressure, showcasing the growing influence of institutional investors in the cryptocurrency market.

As Bitcoin edges closer to the $100,000 milestone, its future trajectory will depend on whether demand can keep up with supply. Factors such as continued ETF inflows, market sentiment, and broader economic conditions will play critical roles in determining whether Bitcoin can maintain its momentum or face heightened volatility.