Bitcoin has been showing weakness in the past few weeks as long-term holders are bringing their coins back to the market, raising concerns about the sustainability of the recent uptrend.
Data from Glassnode shows that around 62,000 BTC, worth $7 billion, has been transferred out of long-term holder wallets since mid-October.
This is the first big decline in illiquid supply in the second half of 2025, and it might have a direct impact on bitcoin’s price momentum.
The scarce digital asset, which reached an all-time high above $125,000 in early October, is now trading around $115,000.
Illiquid bitcoin are the coins that are held in wallets with little to no history of selling. These are coins considered to be “off the market”. When such coins move, it often means that previously inactive investors are starting to sell or transfer their assets.
Glassnode added that this is the biggest decline in months, bringing bitcoin’s illiquid supply down to around 14.303 million BTC as of late October.
This increase in available or liquid supply means bitcoin’s price will struggle to go up unless there’s a big buying demand. Historically, declines in illiquid supply have preceded slower price growth phases as more coins become available for sale.
One of the main reasons for this liquidity shift seems to be selling by mid-sized investors. Glassnode data shows that wallets holding between 0.1 to 100 BTC – roughly $10,000 to $7 million worth of bitcoin – have been consistently selling for almost a year.
These mid-sized sellers have added a lot of supply to the market and created a weaker bullish structure.
Analysts say momentum traders and first-time buyers have also stepped back, creating a gap in demand. “Momentum buyers have largely exited, while dip-buyers failed to step in with enough demand to absorb that supply,” Glassnode noted.
So bitcoin’s price recovery has been limited. Market analysts say it will stay rangebound between $108,000 and $115,000 as selling pressure is more than buying interest.
Smaller investors are selling, but whales—wallets with large amounts of bitcoin—have been accumulating during this period. Over the last 30 days, whale wallets have added around 16,300 BTC according to on-chain data.
“Whale wallets have actually been accumulating during this phase,” Glassnode tweeted. “Since October 15th, they haven’t largely sold their positions.”
So big investors still see long-term value in bitcoin even if short-term holders are cautious. But their accumulation hasn’t been big enough to offset the increased supply from mid-size sellers.
Meanwhile, CryptoQuant data shows that Binance’s bitcoin reserves have dropped to around 613,000 BTC, the lowest since July. This usually means investors are moving their coins to private wallets, a sign of confidence in the asset’s long-term.
But with dormant coins becoming active again, and more bitcoin entering circulation, market sentiment is still fragile. Analysts say this combination of lower illiquid supply and limited demand has historically led to price stagnation or mild corrections.
Beyond on-chain metrics, broader market conditions are also impacting bitcoin’s price.
Traders are watching the U.S. Federal Reserve and speculating that it might ease monetary policy after a period of tightening. If liquidity returns to the system, risk assets including bitcoin, will benefit.
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