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Bitcoin’s price action continues to confuse traders. Despite steady buying from spot Bitcoin ETPs, corporations, and long-term institutional allocators, the market has not shown the decisive upside many expected. This has led to a pressing question circulating across trading desks and social platforms: Who is supplying the market?
According to Chris Kuiper, CFA, Vice President of Research at Fidelity Digital Assets, the answer is becoming increasingly clear. In a detailed post shared on X, Kuiper said that long-term holders — commonly known as HODLers — are likely the main source of selling pressure in this phase of the cycle.
Long-Term Holders Are Quietly Reducing Supply
Kuiper pointed to a key on-chain metric known as “Percent of Supply Last Active 1+ Years Ago.” This indicator tracks how much Bitcoin has remained unmoved for at least a year. Historically, the amount of dormant supply rises during bear markets as investors hold through losses. During bull markets, this line often falls sharply as long-term holders distribute their coins into strength.
However, Kuiper noted that something unusual is happening in the current cycle. Even though Bitcoin reached new highs earlier in the year, the percentage of long-term inactive supply did not collapse as dramatically as in past bull markets. Instead, the decline has been “a consistent slow bleed.”
He explained that this signals long-term investors have been selling gradually as price moved sideways rather than engaging in aggressive profit-taking at the top, as seen in previous cycles such as 2017–2018.
Investor Fatigue Is Setting In
Kuiper said this pattern aligns with what he is hearing from clients. Bitcoin’s performance has lagged behind gold and even the S&P 500 in recent months. Many long-term investors who expected a more explosive bullish breakout are now reconsidering their positions.
He added that a number of investors were preparing to reduce exposure during what is typically a seasonally strong period — October and November. When that strength failed to appear, some long-term holders began adjusting their portfolios ahead of year-end.
“People are getting tired,” Kuiper wrote. Many are now taking gains where they can, repositioning for tax purposes, or simply stepping back after a long period of volatility and uncertainty.
A Different Cycle Compared to 2017 and 2021
On-chain data supports the idea that the current market structure differs from previous cycles. During the 2017–2018 bull run, the long-term holder supply metric collapsed sharply as prices spiked and then plunged. In the 2021 cycle, the decline in long-term inactive supply was less intense but still showed a clear surge in distribution near the top.
Today, the curve has been trending downward since 2023, but with no dramatic drop. This signals a more controlled release of older coins — a type of measured selling rather than panic exits or euphoric profit-taking.
This distinction is important because it suggests Bitcoin may be in a transitional phase where supply is being rebalanced slowly rather than aggressively.
CryptoQuant Data Confirms the Gradual Unwinding
CryptoQuant’s Head of Research, Julio Moreno, presented an alternative visualization that supports Kuiper’s analysis. Moreno highlighted the “1-year inactive supply drawdown,” which measures how many long-dormant coins are returning to circulation.
His chart shows:
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2017–2018 cycle: inactive supply fell ~20 percentage points
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2021 cycle: inactive supply fell ~10 percentage points
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2024–2025 cycle: inactive supply again down ~10 percentage points so far
While the total amount of supply leaving dormancy is similar to the 2021 cycle, the pace is much more gradual. Instead of a sharp burst of distribution at a cycle top, the current drawdown resembles a slow, multi-month rotation.
Moreno’s inverted chart shows a rising purple curve representing this trend. Kuiper praised the visualization and said he will continue watching its slope to determine when seller exhaustion may set in.
Market Fundamentals Still Strong, but Price Lags
Kuiper emphasized that the broader fundamentals supporting Bitcoin remain positive:
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Spot Bitcoin ETPs collectively hold over 1 million BTC, roughly 5% of total supply.
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Institutional exposure continues to expand through regulated investment products.
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Corporate treasury participation has increased steadily.
Despite these developments, price action has not followed the same upward trajectory. Kuiper argued that this divergence offers valuable insight: long-term holders are distributing supply into the market at a steady pace, which is dampening upward momentum even as demand strengthens.
A Market Waiting for Seller Exhaustion
The key question now is whether the market is close to exhausting this supply. Kuiper believes monitoring the slope of dormant supply drawdowns and other on-chain indicators will help identify when long-term holders have finished repositioning.
Until then, Bitcoin’s price may continue to reflect this tug-of-war between steady institutional demand and gradual long-term holder distribution.
For now, Kuiper concludes that the market remains in a phase where strong fundamentals and sluggish price action continue to conflict — but that imbalance may eventually create conditions for the next major move.
