Bitcoin (BTC) is trading above $70,000 as traders attempt to stabilize price action following the sharp sell-off last Friday, which briefly pushed BTC below $60,000 and erased nearly $10,000 in a single session.

Onchain data shows long-term holders (LTHs) reduced exposure at the fastest pace since December 2024, but the total supply held by long-term investors continued to rise in 2026, a divergence that may indicate traders repositioning and what may prove to be discounted Bitcoin.

Key takeaways:

• Bitcoin long-term holders recorded a –245,000 BTC net position change last week, the largest daily outflow since December 2024.

• Despite selling, LTH supply rose to 13.81 million from 13.63 million BTC in 2026, showing investors believe the sell-off generated discounted buying opportunities.

Bitcoin one-day chart. Source: Cointelegraph/TradingView

Bitcoin distribution rises, but supply continues to age

Glassnode data shows that the BTC LTH net-position change over 30 days reduced exposure by 245,000 BTC last Thursday, marking a cycle-relative extreme in daily distribution. Similar spikes in LTH net position change appeared during the corrective phases in 2019 and mid-2021, when prices consolidated rather than transitioning into downtrends.

Bitcoin long-term holder net position change. Source: Glassnode

Meanwhile, CryptoQuant data shows total LTH supply increased to 13.81 million from 13.63 million BTC in 2026, despite the ongoing distribution. This divergence reflects the time-based nature of LTH classification. 

As the short-term holders reduce trading activity during periods of uncertainty, supply continues to age into long-term status. As a result, the LTH supply can rise even while older cohorts sell.

Bitcoin long-term holder flow. Source: CryptoQuant

The long-term holder spent-output profit ratio (SOPR) regained a position above 1 on Monday, signaling recovery after a period of realized losses. With Bitcoin above the overall realized price of $55,000, this condition may be aligned with a base or bottom building phase. 

Related: Bitcoin whales took advantage of $60K price dip, scooping up 40K BTC

Macro conditions continue to dominate near-term risk

Macroeconomic factors may remain the main driver of near-term volatility, with January U.S. Consumer Price Index (CPI) data due Wednesday amid elevated policy uncertainty.

Markets currently assign 82.2% odds of no rate cut at the March Federal Open Market Committee (FOMC) meeting, according to CME FedWatch, reflecting persistent inflation pressure and a restrictive policy outlook.

Uncertainty around Kevin Warsh’s anticipated appointment as the US Federal Reserve chair has added pressure to risk assets. Elevated treasury yields and tight financial conditions continue to pressure risk assets, with the US 10-year yield holding near multi-month highs of 4.22% and credit spreads remaining compressed. Periods of high real yields have coincided with lower crypto liquidity and muted BTC spot demand.

Meanwhile, the US dollar index (DXY) has dropped below 97 on Monday, after rebounding from January lows, remaining a key source of volatility for Bitcoin.

Related: BTC traders wait for $50K bottom: Five things to know in Bitcoin this week

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