Analysis: The market downturn coupled with BTC chip distribution may not be as frightening as it seems, as potential selling pressure is released ahead of time during the bear-to-bull transition phase.
BlockBeats news, October 12: Analyst Murphy stated that data shows long-term holders (LTHs) transferred approximately 32,000 BTC to trading platforms cumulatively from October 7 to 8. This is the second-largest single-day transfer by LTHs since the major drop on February 5 this year, and it is highly likely a potential sell intention. However, these 32,000 BTC cannot all be regarded as active distribution by LTHs.
During the same period, US government-related wallets transferred approximately 17,200 BTC to Coinbase Prime. Considering that Coinbase Prime is the official custodian and trading service provider designated by the US Marshals Service, this transfer does not necessarily mean a sale; it could also be related to asset custody consolidation or case disposal. After excluding this special transfer, the remaining approximately 14,800 BTC is the potential selling pressure that warrants more attention, mainly from long-term holdings with coin ages of 6-12 months and 3-5 years.
During the bear-to-bull transition period, LTHs transferring an average of 2,000-3,000 BTC per day to trading platforms is typically within the normal range. Once the transfer volume suddenly significantly exceeds the average, it is often accompanied by special events or bearish market expectations. However, "market decline combined with LTH coin distribution" is not necessarily a bad thing, especially during the bear-to-bull transition stage. From the entity-adjusted CDD (Coin Days Destroyed) data, whenever the market pulls back and CDD rises sharply, it often means that some long-dormant coins are beginning to become active, or even choosing to exit. But in hindsight, although the decline brought short-term selling pressure, it also prompted some less committed coins to complete their turnover. The early release of potential selling pressure actually reduces resistance for subsequent market movements.
From another perspective, this is also a manifestation of the bull market process in which long-term accumulated coins are gradually activated and turnover activity continues to increase. So there is no need to be overly worried about every LTH distribution. What truly deserves attention is whether these coins can be effectively absorbed by the market. After all, a bull market cannot consist only of buying without selling. Old coins continuously being released while new capital keeps absorbing them is itself the process of the market completing value rediscovery. Sufficient coin turnover is, in fact, an important foundation for a market cycle to go further.
