Bitcoin ($BTC) is reportedly witnessing a crucial turning point in the case of the supply ratio from long-term holders to short-term holders. As per the data from Glassnode, Bitcoin has recorded a sheer dip in Long-Term Holder to Short-Term Holder Supply Ratio following reaching cycle highs amid the wider consolidation and profit-taking. The blockchain analytics platform took to social media to share insights into Bitcoin’s present decline in supply.

Bitcoin Long/Short-Term Holder Supply Ratio Declines as Profit-Taking Raise Concerns

As per the on-chain statistics, long-term holders (LTHs) have recently been steadily accumulating Bitcoin ($BTC), boosting the price to the $120K-$123K range. Nonetheless, in line with the latest data, profit-taking is growing to a substantial extent and may emerge as a significant concerning point. Specifically, the formerly dormant coins are returning back to the market.

Apart from that, the data also points out that, irrespective of this cooldown, the price of the flagship crypto asset remains robust. At the moment, Bitcoin is changing hands above $118K, expressing a considerable recovery toward the $120K mark following a brief dip. Additionally, the LTH/STH supply ratio is currently elevated, highlighting a supply squeeze while the short-term $BTC traders have mostly exited. In this respect, long-term, high-conviction holders are now dominating the market.

Despite Bearish Technical Indicators, Institutional Interest, and Accumulation Stay Strong

Based on the historical data, such setups have mostly taken place before key upside moves amid the tightening available liquidity. At the same time, the market sentiment is split. Particularly, the technical indicators present a short-term caution, with 1-hour MACD presenting a bearish outlook amid the fading open interest. This suggests a mild correction or a consolidation period. Contrarily, macro demand is still robust as the institutional buyers are continuously accumulating amid the strong inflows into the ETF sector.

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According to Glassnode’s data, the Long-Term Holder to Short-Term Holder Supply Ratio is highlighting a noteworthy drop after its jump to cycle highs. A key role in this respect is played by the growing profit taking and consolidation. Even then, the macro indicators, on-chain activity, and social sentiment stay bullish, pointing toward another potential price breakout.