Almost all Bitcoin long-term holders are back in the black this week after the leading digital asset resurged above $50,000 on Monday for the first time since December 2021.

That’s despite a major market pullback last month following the launch of several Bitcoin spot ETFs, characterized by many analysts as a “sell the news” event. In fact, on-chain analysis suggests the price pullback looked much like “a classic bull market correction,” according to Glassnode’s February 14 market analysis newsletter.

Bitcoin Long-Term Holders Cash Out

“The market saw a meaningful uptick in speculation in the lead-up to the spot ETF approvals in January,” Glassnode wrote. “In response, many Long-Term Holders (LTH) transacted their coins, whether to take profits or perhaps to re-balanced their holdings into one of the new ETF products.”

Back in November, the number of Bitcoin held by “long-term holders” touched an all-time high of 14.996M BTC – roughly 76% of the network’s circulating BTC supply. That includes any BTC that hasn’t moved for at least 155 days

#BITCOIN‘S LONG-TERM BULL RUN.

Halving is coming.

For investors. pic.twitter.com/TnCMjE1TgV

— AO (@AurelienOhayon) February 6, 2024

This figure has fallen by roughly 299,500 BTC in the past three months. Glassnode attributes the slide to an even mixture of long-term holders finally spending their coins, and the tsunami of outflows from the Grayscale Bitcoin Trust (GBTC) since converting into an ETF last month.

As of January 13, Grayscale has suffered non-stop outflows post-launch adding up to 156,327 BTC worth $6.5 billion.

Regardless, more than $10 billion have flown into newer Bitcoin ETFs launched by BlackRock, Fidelity, and others have helped offset the selling pressure, taking BTC to $52,000 on Wednesday.

Is Grayscale’s Selling Over?

At current prices, Glassnode said less than 13% of the total supply is still at a loss, representing long-term holders who bought in at the 2021 bull market peak.

As for short-term holders, roughly 50% of investors entered a loss during last month’s pullback to $38,000. Glassnode claims this was more of a “garden variety” correction that suggests Bitcoin’s price isn’t at risk of major declines.

“During robust and resilient uptrends, these points of balanced STH supply profitability tend to form support,” Glassnode explained.

The worst of Grayscale’s selloff appears to have come to an end, with the firm posting under $100 million of outflows for five of the last six trading days. Meanwhile, net flows to ETFs have surpassed $400 million for the last four trading days, topping $630 million on Wednesday alone.

Trading volume for BlackRock’s ETF also appears to be overtaking Grayscale, with the fund averaging $760 million in volume per day this week.

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