Bitcoin Impact Index (Week 22): Long-Term Holder Supply Reached a New All-Time High — Is it Good or Bad?

Signal of the week: Long-term holder supply hit a new all-time high in absolute terms, collectively owning 16.39 million BTC — 82% of all BTC in circulation. Typically, LTH supply updates its all-time high in the middle of the bear market.

Bitcoin briefly dropped below $73,000, falling out of the top 10 largest assets in the world by market cap amid a new wave of risk aversion fueled by the U.S.-Iran conflict. Despite this, long-term holders continued their BTC accumulation, following similar patterns from previous bear markets.

About the Bitcoin Impact Index

The Bitcoin Impact Index measures which groups of Bitcoin holders are under financial stress, how severe that stress is, and whether it’s severe enough to shake confidence in the market’s direction. It combines on-chain holder behaviour, ETF and derivatives activity, and exchange-level liquidity flows into a single weekly score between 0 and 100. Unlike sentiment indicators, it deliberately excludes social media and volume data to focus on what participants are doing rather than what they are saying.

Score bands:

• Normal Rotation (0–24) — routine profit-taking, no structural shift
• Elevated Repositioning (25–49) — specific groups shifting positions, pressure uneven across the market
• High Impact (50–74) — broad stress across multiple holder groups and institutional flows simultaneously
• Critical Impact (75–100) — full capitulation: LTH losses, large ETF outflows, major liquidations, and heavy exchange inflows at once

## Week 22 (May 25–31): BII-W 54.6 — High Impact

Positive signals: long-term holders keep absorbing selling pressure

Long-term holders added around 30,000 BTC this week, bringing their total holdings to a new all-time high of 16.39 million BTC. This cohort now controls 82% of all circulating Bitcoin.

In previous bear markets (2014, 2018, 2022), long-term holder supply typically reached a new all-time high in the middle of the bear market, and this cohort continued actively accumulating closer to the end of the bear market. The current reading is consistent with that mid-cycle accumulation phase, suggesting the bear market might be far from over.

As such, LTHs act as the main force absorbing selling-pressure right now, but their accumulation pace is slowing down. If LTHs soon switch from accumulation to distribution, this could be viewed as a double-edged sword:

• On one hand, it can indicate rising demand from short-term holders, which typically occurs at the start of major Bitcoin rallies.
• However, if it occurs while the market is bearish, this could accelerate bearish momentum. A notable example is November 2025, when Bitcoin’s price dropped nearly 18% in a month.

For now, accumulation is still present, but it is being deployed with increasing caution.

Negative signals: three consecutive weeks of $1 billion+ ETF outflows

ETF outflows reached $1.42 billion this week, and it’s the third consecutive week above $1 billion in outflows. This the second largest set of outflows in three weeks in spot Bitcoin ETF history. If this streak continues, it could suggest wider capitulation of ETF investors, which can reinforce bearish momentum

Short-term holder stress deepened further. Their realized P/L fell below –0.77, the worst reading since February selloff. As a result, recent buyers are sitting on meaningful losses and the pressure to sell is high. LTH SOPR also slid to 0.83, meaning even the long-term holders who are selling are doing so at deeper losses, though the majority are still holding rather than distributing.

Long liquidations made up 88% of total this week, which is the most one-sided reading since late January. Leveraged bulls are being systematically flushed out, stablecoin flows remain negative, and realized loss density rose its highest in two months — all pointing out that bears are getting a stronger foundation.

Mixed signals: funding rates turned positive, but not for bullish reasons

Funding rates flipped slightly positive this week but it should not be read as a positive signal in isolation. This might suggest that the remaining longs are paying to stay open while being squeezed out one by one, rather than genuine bullish conviction building.

Exchange netflow remains positive, meaning more BTC is arriving at exchanges than leaving. That is a sell-side signal — holders are moving coins to where they can be sold. The movement is not dramatic compared to the February peak, but it is directionally concerning.

What could happen next

Bitcoin is currently flirting with the 128-day moving average at $74,000, which coincides with the middle line of the weekly Bollinger Band. A clean break below $74,000 would remove a significant structural anchor and open the path toward $70,000 or lower.

In the short term, lower timeframe signals suggest a brief bounce toward $77,000 is possible, but the path of least resistance is still downward. For that to change, bulls need to reclaim $78,000, where both the true mean price and the short-term holder cost basis are located. Holding above that level would bring most recent buyers back to breakeven and remove the self-reinforcing selling pressure their losses currently create.

The longer-term picture depends on what long-term holders do next. If LTH supply continues rising, we may see a classic bear market like in 2018 and 2022. If LTH supply starts declining rapidly, that would signal either the end of the bear market or that a potential bottom might be delayed even further than 3-6 months.

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