When the "smart money" starts moving, the rest of the market tends to hold its breath.
In the final quarter of 2025, we witnessed a tectonic shift in Bitcoin’s ownership structure that redefined the conclusion of the year. Long-term holders (LTHs) embarked on a distribution spree that tested the resolve of every Bitcoin market participant. But as we transition into 2026, the tide is beginning to shift.
In this Premium market update, I break down why long-term holder behaviour effectively closed the chapter on Q4 2025, why their recent distribution overwhelmed even strong ETF demand, and what the profit levels among LTHs tell us about potential bottoms, or extended corrections.
Key insights
Q4’s Big Move: We explore why long-term holder distribution became the dominant force shaping the year’s close.
A Subtle but Crucial Shift Emerges: Early on-chain signals suggest the selling pressure may be easing in a meaningful way.
Beyond the Short-Term Flip: We decode what the longer-term view of holder behaviour reveals about potential cycle turning points.
Profit Dynamics and Incentives: The changing unrealised gains among veteran holders influences future supply pressure and marks textbook accumulation opportunities.
The Q4 Tug-of-War
The closing months of 2025 were defined by a single narrative: the aggressive distribution of Bitcoin by long-term holders.
In the world of on-chain analytics, we define a long-term holder as any wallet holding coins that last moved > 155 days ago. Statistically, once a coin crosses this threshold, the likelihood of it being spent drops dramatically. These are the investors who typically buy in the depths of the bear market and sell into the euphoria of the bull.
When this cohort starts selling in bunches, it usually marks local or even cycle-defining peaks. They’re commonly referred to as the "smart money" because they typically realise profits and transfer their coins to short-term holders (or the"dumb money" in this scenario) at the top.
While some analysts argued that LTHs were simply rebalancing for safety moving their physical coins into the new spot ETFs, this theory doesn't hold water under closer inspection. The ETF inflows, while substantial, did not match the LTH outflows by a long shot.
This was a genuine exit of supply. Despite the consistent, relentless bid from spot ETFs and corporate treasuries, the sheer volume of LTH selling simply could not be outlasted, leading to the price volatility we’ve recently endured.
This is a critical lesson here: price doesn’t normally top because demand disappears. It tops because supply overwhelms it.
From Distribution to Potential Accumulation
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