🚨 Signs of Massive Sell-Offs by Long Term Holders: What Does It Mean for Bitcoin?

Two on-chain metrics are signaling significant activity from Long Term Holders (LTH), indicating potential massive sell-offs:

🔍 Reserve Risk Indicators
These include metrics like VOCDD, MVOCDD, Reserve Risk, and MVOCDD Signal. They evaluate Bitcoin’s sustainability by comparing its price to the average cost basis of LTH:

VOCDD and MVOCDD: Measure the velocity of coin destruction.
Reserve Risk: Assesses whether Bitcoin is overbought or oversold.
MVOCDD Signal: Acts as a market peak signal, indicating when Bitcoin might be nearing a top.

🔍 Coin Days Destroyed Terminal Adjusted (CDD Terminal Adjusted)
This metric refines the traditional CoinDays Destroyed by factoring in Bitcoin’s current circulating supply. It offers a clearer view of LTH behavior, highlighting significant coin movements or inactivity, providing valuable insights into market cycles and investor trends.

What Does This Mean?
Historically, LTH take advantage of Bitcoin’s price rallies to realize profits, as their average acquisition cost is very low. This behavior often creates local resistance levels that can take weeks or even months to break again.

Even if BTC continues to rise in the near future, the data suggests that LTH are no longer as interested in holding. This could shape market dynamics in 2025. However, it’s important to note:
These metrics don’t define a market cycle top but are excellent tools for sentiment analysis.

Learn more about how on-chain metrics are shaping Bitcoin’s future at Alphractal

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Analysis of the Funding Rate and Bitcoin Price Movement

The aggregated Funding Rate reflects the balance between buyers and sellers in perpetual futures contracts. When the Funding Rate rises significantly, it usually indicates a predominance of long positions, signaling market optimism.

However, the current behavior shows that after the Funding Rate increased and coincided with a price rise, Bitcoin has started to decline, although the Funding Rate remains positive. This scenario may indicate:

1. Excessive optimism: Many traders might have opened long positions during the price surge, pushing the Funding Rate higher, but the lack of additional buying pressure resulted in a correction.

2. Selling pressure: The price retracement could be a result of profit-taking or the entry of short positions taking advantage of the elevated Funding Rate.

3. Short-term support: The still-positive Funding Rate suggests that the market retains some level of confidence, but it’s crucial to watch whether it continues to decline, which could signal a shift in sentiment.

Conclusion: The price drop, despite the positive Funding Rate, suggests caution. A persistently high Funding Rate may expose the market to liquidations, while stabilization or reversal of the Funding Rate should be monitored to anticipate future moves.

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The Bitcoin Perpetual contract price on Binance is trading $28 below the Spot price today, indicating a negative basis. This reflects a possible bearish sentiment, with increased short positions driving the futures price lower. Traders might be anticipating further price declines, though this could also create opportunities for arbitrage between the Spot and Perpetual markets.

Bitcoin Surprises Traders and Breaks $107k

After an increase in short positions by traders, Bitcoin defied expectations and broke through the $107k barrier, catching the market off guard.

🔎 What explains this?
The Leveraged Traders' Sentiment metric indicated a rise in leveraged short positions, signaling bearish sentiment. Interestingly, the market moved in the opposite direction, triggering liquidations and driving BTC's price higher.

💡 How does this metric work?
Leveraged Traders' Sentiment evaluates leveraged traders' behavior by combining:

- Top Trader Long/Short Ratio (Positions)
- Top Trader Long/Short Ratio (Accounts)
- Funding Rate, which measures the cost of holding leveraged positions.

This indicator is powerful because it can warn of movements contrary to the majority's expectations, acting as a barometer for trader behavior and potential mass liquidations.

⚠️ Opportunity or risk?
For investors, it’s a reminder: beware of excessive optimism or pessimism in the market. Detailed analysis of metrics and trends is key to avoiding rash decisions.

🎯 This movement highlights how Bitcoin defies expectations and underscores the importance of tracking advanced metrics like this one to successfully navigate the crypto market.

🔎 Premium Index on Spot Exchanges: A Signal of Buying and Selling Pressure in the Short Term!

Kraken and Bitfinex are trading at a discount, meaning Bitcoin prices are below the global average. This indicates an increase in selling pressure on these platforms.

Meanwhile, Coinbase, Gemini, and Bitstamp show a premium, with prices above the average, signaling stronger buying pressure.

These movements highlight the divergent behavior of investors across exchanges, potentially foreshadowing shifts in market dynamics.

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Liquidity Zone: Measuring Net Delta Position with a Heatmap

The Liquidity Zone metric tracks the Net Delta Position over time using a heatmap.

Positive and High Values: Indicate significant liquidity associated with Long positions opened in recent months.

Negative Values: Highlight areas dominated by Short positions, often marking local price reversals.

Current Analysis:
The market is currently highly liquid in Long positions. This means future liquidations will disproportionately affect Longs compared to Shorts.

If the price rises, there will be minimal liquidation volume for Shorts.

However, if the price drops, liquidation bars for Longs will be massive.

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$SUI UI has reached high risk in both the short and long term, making a correction the most likely scenario!
However, according to the 7-day Aggregated Liquidation Levels, it could drop to $5 to liquidate the last bears. Meanwhile, the 30-day levels also suggest a probability of long liquidations in the future.

For the first time in history, Bitcoin hit a new all-time high before the 2024 Halving.

In previous cycles, every new all-time high occurred after the Halving.

Could the ETF approval and growing institutional interest be changing the game this time?

Historically, when we compare price cycles around Halvings, Bitcoin tends to experience corrections during bull markets. Currently, we’re in that critical range—200 to 250 days after the Halving.

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DOGE and PEPE are two major memecoins that are highly exposed to high leverage on exchanges.

DOGE is currently in two large liquidation pools: one near $0.50, related to Shorts positions, and another below $0.35. Overall, there is a slight advantage for Long positions, but regardless of the future price direction, this will result in significant liquidations. As for PEPE, its main liquidation pool is below the current price, as many traders were liquidated on December 7th following a big pump, leaving Long liquidations as the largest current concentration.
In summary, both DOGE and PEPE are in a critical moment, with liquidation pools that could trigger volatile price movements, no matter which direction the market takes.

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$DOGE $PEPE

The 30-day Open Interest delta across all exchanges is starting to decline.

This indicates that, as the year-end approaches, investors are closing their positions.

Historically, a drop in Open Interest is associated with price declines.

However, we must monitor it closely, as within 24 hours, $1.7 billion returned to leverage, according to the daily Open Interest delta.

This contributed to BTC returning to the $101k range. If more interest returns in the coming days, it is likely that BTC will continue its upward trend, and the 30-day delta will stop falling.

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⚠️SOPR Trend Signal has yet to indicate a sell signal for Bitcoin, but it's almost there

Historically, the SOPR Trend Signal has been an excellent metric for evaluating trend changes in Bitcoin's price in a fascinating way!

When the metrics cross below a certain threshold, clear buy signals are shown, and when they cross above a certain level, sell signals are plotted.

Currently, the metrics are very close, and if the blue line crosses below the orange line, a sell signal will be indicated. This would suggest that investors have distributed enough, and a trend change is imminent. Additionally, this can occur with a few days of delay—meaning when the metrics cross, it indicates that the local top has occurred and the price will follow a new trend, which in this case is downward!

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Addresses with 100 to 1000 BTC are the Only Ones Accumulating!

Meanwhile, all other addresses are in Distribution, meaning they are selling their BTC.

However, there’s an interesting twist in this story. Since the end of 2020, addresses holding 100 to 1000 BTC have shown a strong correlation with Bitcoin’s price action. In other words, when they accumulate, we see upward price movements, and when they distribute, price declines are observed.

Even though price action may take days or weeks to materialize, this address category seems to best represent what we call Whales or Market Makers, as we know that most addresses holding over 1000 BTC belong to Exchanges.

Thus, this category seems to better represent institutional action compared to other cohorts.

Currently, we refer to these addresses as "🐬The Dolphins," and they accumulated about 344k BTC at their peak on December 6, over a 60-day period. In the past week, they distributed around 11K BTC, which likely had a direct impact on recent volatility.

But it's still too early to say that they’ve stopped accumulating, so it’s crucial to track Onchain metrics daily!

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🚨 Altcoins Underperforming in the Short Term! 🚨
In the short and medium term, the Altcoin Season shows signs of weakening. Altcoins have been underperforming compared to Bitcoin (BTC), with BTC dominance rising even as its price declines. This movement suggests that funds are migrating from altcoins to Stablecoins or BTC, leaving the altcoin market more vulnerable.

🔍 Adjustment cycles are normal
During BTC's bull cycles, it’s common for altcoins to lose part or even all of their recent gains. While BTC maintains high price levels, many altcoins give back previous highs.

📉 December and market uncertainty
Historically, December is known for market indecision. For instance, in December 2020, XRP gave back all the gains it achieved in November, recovering only in February 2021. These movements are often driven by Market Makers, who push prices down to liquidate positions, trigger stop losses, and generate fear before a new rally begins.

⚠️ Risk management is key
Altcoin bull and bear cycles tend to be short, making profit-taking a challenge. Diversifying between BTC, altcoins, and stablecoins is crucial to reduce risk and capitalize on opportunities.

💡 Stay alert to market movements and protect your capital.
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#DUMP #ALTCOINS

We’ve added Risk and Return Analysis for 1700 Cryptocurrency Pairs!
Now, you can assess the risk of over 1700 cryptocurrency pairs using the adjusted Sharpe Ratio and Normalized Risk Metric (NRM), two powerful metrics to measure an asset's risk.
🔍 Sharpe Ratio: The adjusted Sharpe Ratio measures an asset’s performance by dividing its expected return by its volatility. It shows the return per unit of risk, helping to identify assets with a higher risk-adjusted return. The higher the Sharpe Ratio, the better the risk-adjusted return.
📈 Normalized Risk Metric (NRM): The NRM normalizes an asset’s volatility and risk, comparing it to its historical performance. This provides a consistent risk assessment, regardless of price movement magnitude, enabling fairer comparisons between assets, especially in volatile markets.
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The number of addresses holding more than 10 BTC has risen rapidly in recent days. However, addresses with over 10K BTC have been decreasing rapidly.

This could indicate several things:

1. Addresses holding more than 10 BTC often represent institutional players, sharks, miners, and others.

2. On the other hand, addresses with over 10K BTC are mostly owned by exchanges, funds, whales, and long-term investors (Long-Term Holders).

Other possibilities may exist, but generally, major exchanges hold the largest BTC addresses in terms of quantity.

Thus, there has been evident institutional interest recently, and sharks have been more active as BTC approached the $100K price level. This activity caused many BTC to migrate from the largest addresses to smaller ones, such as those holding 10 BTC or more.

These metrics spark curiosity about what’s happening behind the scenes on the blockchain and help us understand the dynamics between these large addresses.

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The number of Bitcoin Onchain transactions above $100,000 USD has reached the same level as in 2021. This reflects that whales are highly interested in moving their Bitcoin on the blockchain. Historically, high numbers of large transactions have reflected bullish periods and local tops. However, nothing has surpassed the 2017 bull cycle, which saw an average of 74k transactions. Currently, the number is similar to 2021, with daily averages ranging from 20k to 25k transactions!

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The difference between BID and ASK in the Spot market across various Bitcoin exchanges has continued to decrease in the short term whenever BTC approaches $100k. Currently, the recorded difference is -139 USD, reflecting stronger selling pressure.

The Difference Bid-Ask Mean Price Spot (USD) measures the difference between the average buy order price (BID) and the average sell order price (ASK) in the Spot market, using the dollar as a reference.
This metric helps identify the balance between buying and selling pressure in the market. Positive values indicate stronger buying pressure, while negative values suggest a higher volume of sell orders.
It is a valuable tool for analyzing Spot market sentiment and understanding how buyers and sellers are positioned, especially during periods of high volatility or at key price levels, such as $100k for Bitcoin.

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$BTC #Spot #Sentiment

Movements on the Blockchain are once again showing signs of distribution and profit-taking.

According to The On-Chain CapFlow Sentiment Index, Bitcoin has re-entered a zone where blockchain activity indicates distribution signals. However, this trend could persist for several days, as observed in previous cycles.

Additionally, based on the SOPR metric, one of the largest profit-taking events in BTC's history is being observed, suggesting that many holders are seizing the opportunity to realize gains.

This trend may continue for some time, with metric adjustments expected in the coming months. The MVRV Z-Score and Long-Term Realized Cap Impulse suggest that Bitcoin’s uptrend is likely to persist, though corrections and metric reconfigurations are common along the way.

For the price to enter an extreme overbought zone, Bitcoin would need to reach at least $122k USD, according to the Alpha Price metric. This powerful tool estimates realized price regions with high accuracy.

In summary, we are witnessing significant profit-taking, especially by long-term holders, which could lead to corrections over time. However, it’s likely that the next all-time high will only occur when more sensitive metrics for peaks and troughs enter the extreme euphoria zone—something that may take several months to materialize.

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