The second wave of chips is being actively exchanged, long-term holders are gradually selling, while the strong purchasing demand from short-term holders is enough to continue driving the price of Bitcoin upward. Analyzing UTXO age data reveals that those long-term investors who have held Bitcoin for over 6 months have started to gradually cash out some profits against the backdrop of a rapid price increase. The yellow peaks indicate individuals holding Bitcoin for 6 to 12 months, and it can be observed that their proportion has significantly increased in the past six months. Looking further back, from 6 months to a year, corresponds to the group that entered the market last October to the beginning of this year; they are gradually moving out of Bitcoin.
I have always emphasized the viewpoint that a true large-scale bull market can only occur when long-term holders transfer Bitcoin to new investors. Many people mistakenly believe that when long-term holders sell Bitcoin, the market has peaked in the short term. In reality, this is a very erroneous view. The bull market cycle of Bitcoin requires strong capital transfer as support. The gradual reduction of holdings by long-term holders allows Bitcoin to flow into the hands of new investors. This process of chip exchange is what helps the market form a strong upward momentum. As we have already seen, after the Federal Reserve cut interest rates in late September, these individuals have begun to distribute their holdings, and the active demand from short-term holders is sufficient to absorb these distributed Bitcoins. The Bitcoin held by long-term holders is gradually flowing into the market, being absorbed by a broader range of investors.
