Diamond Hands Cracking? 187K BTC Dump by Long-Term Holders Signals Exhaustion or Deeper Plunge Ahead

Bitcoin's bedrock believers just moved mountains—or rather, 187,000 mountains. Long-term holders offloaded a staggering amount of BTC, sparking fierce debate: is this the final flush before liftoff, or the start of something darker?

Reading the Tea Leaves—or the Blockchain

When the OGs sell, markets listen. This isn't retail panic—it's strategic redistribution. Some call it capitulation; others see accumulation in disguise. Either way, volatility's back on the menu.

Exhaustion or Opportunity?

History favors the bold. Major sell-offs often precede massive rallies—assuming you survive the drawdown. This isn't for the faint-hearted. It's crypto's ultimate stress test.

Timing beats guessing. While traditional finance still tries to short innovation, smart money's already positioning. The real question isn't if—but when—the next leg up begins.

Methodology matters for interpreting the numbers

LTH Net Position Change calculates the 30-day change in the supply held by long-term holders, a negative reading over the past month that sums to about 183,000 BTC.

CryptoQuant’s daily LTH “spent” measure the number of long-aged coins moved on the chain in a given day, which produced the early-September burst.

Both datasets define the cohort using the 155-day holding threshold and are entity-adjusted to reduce double-counting. However, the first tracks a rolling balance change, while the second tracks daily transfer volume.

Cycle context helps place the move. In prior bull phases, long-tenured wallets tended to distribute into strength while new demand absorbed supply, then the trend reasserted once sell pressure waned. Glassnode’s Week On-Chain series has documented these handoffs, including late-cycle distribution regimes and profit-taking episodes around new highs.

Those windows did not end the cycle by default; they coincided with local peaks that resolved once fresh capital stepped in and realized capitalization rose.

The current setup shares some of those features. Coins that rarely move sit at an all-time high, pointing to a large base of hands with low turnover, while a discrete pocket of older supply hit the tape over the past month.

If ETF allocations continue to create incremental bid, the balance between those two forces shows up quickly in realized flows, exchange balances, and short-term holder positioning. The absorption lens is mechanical, and the issuance is fixed, so the question is whether primary-market buyers, OTC desks, and shorter-tenure wallets neutralize the inventory that LTHs just released.

Three markers will determine how this resolves.

First, the LTH Net Position Change turning back toward zero or positive WOULD show that the heavy month of distribution has cooled, which historically preceded periods where supply again matured into long-tenure status.

Second, breadth and persistence across ETF issuers, for example, flows into IBIT, FBTC, BITB, and ARKB on the same days rather than a single fund carrying the tape, would argue for more durable primary-market demand, which can be tracked via Farside’s issuer breakdown or SoSoValue.

Third, profitability metrics for older coins, such as LTH-SOPR, can reveal whether those who sold did so at a profit and are inactive or whether further supply may surface if prices bounce.

A brief look back provides useful boundaries

Glassnode’s work around distribution phases shows that spikes in LTH spending are often clustered NEAR local highs, then fade as new hands absorb inventory. The key difference in 2025 is the presence of spot ETFs as a standing buyer, a structural feature that did not exist in prior cycles and that can be monitored day by day through issuer flow disclosures.

If those flows hold while illiquid supply continues to expand, the effect is a tighter tradable float even after older coins move. If those flows roll over while LTH distribution persists, the market carries extra inventory that must be cleared at a lower price.

For readers tracking this in real time, use a simple overlay, LTH 30-day net change from CryptoQuant, daily U.S. spot ETF net FLOW from SoSoValue or Farside, and price. Add a flag on the early-September session with the year’s largest LTH spent print. Add an annotation in late August, marking illiquid supply near 14.3 million BTC. Color is optional, clarity is not; the point is to watch whether the next set of buyers absorbs what long-tenured wallets just released.

The near-term read is data-dependent. The next several daily ETF prints and the next monthly LTH balance change will show whether the 187,000 BTC distribution was absorbed.