Recent on-chain data reveals a continued decline in Bitcoin's long-term holder supply. This trend is a bit scary, at least for those who still bet high on the next BTC rally in the near future. Long-term holders (LTHs) are investors who have held Bitcoin for over 155 days. They are typically considered the market's most resilient participants, the ones you can count on mostly when it comes to seeking bullish price support levels. Short-term holders (STHs), in contrast, represent more volatile investors. The LTH supply has been decreasing since January's spot ETF approvals. Data shows the sharpest decline occurred during Bitcoin's rally to new price highs. This suggests even long-term investors were tempted to take profits. Simply put, getting the profit out in fiat was so tempting, thet it clearly over-weighted the potential even bigger incomes in the future. The supply continues to decrease, albeit more slowly, despite recent bearish price action. This ongoing trend is noteworthy. Interestingly, the decline persists beyond the 155-day mark since the spot ETF launch. New buying appears outweighed by selling from established holders. CryptoQuant analyst Axel Adler Jr suggests this could indicate market-wide pessimism. However, historical data provides context. Similar LTH supply reductions occurred mid-cycle in previous bull runs. This pattern doesn't necessarily signal long-term bearish sentiment. "The timing of the selloff would indicate that these profits had ballooned so much during the rally that even these diamond hands gave into the allure of profit-taking," Adler noted.

Bitcoin’s recent surge past $71,000 has pushed all long-term holders into profit. According to Glassnode, even those who bought during the peak of the 2021 bull market are now in the green. This marks a significant turnaround as Bitcoin’s price surpasses its previous all-time high. As of June 4, a mere 0.03% of long-term holders were still at a loss when Bitcoin was around $68,000. However, these losses have now turned into gains. Glassnode reports that at $68,000, about 4,900 BTC were still held at a loss, but this figure has since become negligible. The latest surge has sparked renewed market optimism. Glassnode noted that the short-term holders, primarily those who bought in March, are still shouldering most of the unrealized losses. This shift in the market sentiment suggests a potential bullish trend. Bitcoin’s price nearly reached $72,000 on June 6 but settled around $71,080. Regulatory uncertainties and macroeconomic factors continue to influence its volatility. The upcoming U.S. employment report and Consumer Price Index could further impact Bitcoin’s price trajectory. If these reports are favorable, they may propel Bitcoin to new all-time highs, according to market analysts.