Wall Street’s Bitcoin Exit Door: How Institutional Depth Allowed LTH to Spread Record Supply

Bitcoin is struggling to push above the $69,000 level as persistent selling pressure and growing market anxiety continue to weigh on sentiment. After several failed attempts, the price action shows a cautious environment where traders are always reluctant to make new money. Volatility has increased and confidence has eroded, reinforcing the view that the market is still navigating a correction phase rather than entering a sustained recovery.

A recent report from analyst Darkfost provides more context with on-chain data, specifically the Coin Days Destroyed (CDD) heat map. This index measures the number of holding days accumulated by each Bitcoin before it is spent, providing insight into the behavior of long-term holders. When viewed as a heat map, CDD highlights the periods when older coins move, allowing analysts to quickly assess fluctuations in confidence among historically strong investors.

Compared to previous cycles, the current market phase seems to be characterized by high activity of long-term holders. The data suggests that this cluster has been more active than in previous cycles, which may have contributed to the supply of forces influencing price stability. Whether this reflects strategic reallocation, profit taking, or a broader market repositioning remains an important question for investors monitoring Bitcoin’s next move.

According to Darkfost, the activity of long-term holders has historically grown near market peaks, suggesting that distributions from this group often contribute to the formation of local peaks. When older coins start moving after an extended hibernation, it usually indicates profit-taking or portfolio rebalancing, both of which can increase available supply and measure short-term price stability. In earlier cycles, similar spikes in Coin Days Destroyed coincided with overheated sentiment phases and subsequent corrective movements.

However, interpreting this cycle requires more nuance. Not all increases in long-term owner activity are indicative of selling pressure. Some recent CDD spikes appear to be linked to performance factors rather than orientation. Major companies, including Coinbase and Fidelity Investments, have implemented UTXO integration transactions, which can automatically include activity metrics without representing the net supply entering the market.

Technological changes within the Bitcoin ecosystem have also played a role. The growth of Ordinals and text-related activity has encouraged former owners to migrate funds from precious addresses to SegWit or Taproot formats, generating on-chain activity that may distort traditional tokens.

At the same time, the depth of institutional funding has made it easier for long-term holders to gradually diversify positions, which may have a smoother market impact compared to previous cycles.

Bitcoin Faces Key Technical Tests Below Major Moving Averages

Bitcoin’s weekly price structure continues to show continued selling pressure, with the asset struggling to stabilize after missing the $70,000 psychological threshold. The chart shows a decisive breakdown from the end of 2025 to highs near the $120,000 region, followed by a sequence of lower highs and lower lows that usually indicate a market phase of correction rather than a simple consolidation.

The price is now trading below the short-term moving average, which has rolled over and is starting to act as a resistance to volatility. The intermediate trend average is also flat, suggesting bullish intensity, while the long-term average remains flat but far from current price levels. These adjustments often occur during transition phases when the market moves from expansion to redistribution.

Volume patterns reinforce the defensive tone. The recent sell-off has been accompanied by higher trading activity, indicating active distribution rather than a slow decline. However, participation has eased slightly following recent declines, which may reflect temporary trader fatigue.

From a technical perspective, the $65,000–$68,000 region represents immediate support. A failure to hold this area could expose deep retracement levels near long-term trend support, while a sustained retracement of $70,000 would be needed to stabilize sentiment and reopen the path to recovery.

Featured image from ChatGPT, chart from TradingView.com

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