What's goin on, Investors?
I got some questions from my last article, which I found so thought-provoking that I had to write an entire article to answer and give a shout-out to https://www.publish0x.com/@liario for the questions. Your questions cut to the heart of the current market dynamic. Let me address each with what the data reveals—and what it doesn't.
When Will the Real Diamond Hands Stop Selling?
The evidence suggests LTH selling is peaking, but won't stop until the price forces their hand. According to CryptoQuant, long-term holders (>155 days) sold roughly 815,000 bitcoins over the past 30 days—the highest level since January 2024. This isn't panic; it's systematic distribution.
The key insight: LTH selling follows a two-phase pattern. Initially, they sell into strength (profit-taking). But if prices drop toward critical technical levels, weaker hands among them get forced out. Markus Thielen of 10X Research warns that if Bitcoin slides toward $93,000, "more holders may be forced to exit" because "weaker balance sheets may have to liquidate their positions"
Timeline prediction: True diamond hands (the OGs who've held through multiple cycles) will likely stop selling when we approach the $85,000-$90,000 range. At that point, the cost basis for most LTHs makes selling psychologically difficult, and they shift from distribution mode to an accumulation mode. The current selling is described as "gradually taking profits into a softer ETF demand environment—a pattern observed repeatedly in prior cycles." This suggests cyclical behavior, not permanent exit.
ETF Fatigue vs. LTH Conviction: Who Breaks First?
ETF investors will absolutely fatigue first—and the evidence shows they already are. The institutional cohort was never diamond-handed. They came for returns, not revolution. After Bitcoin's underwhelming 10% gain in 2025 (lagging gold and tech stocks), "mounting signs of fatigue" are visible among professional investors. Risk managers are reportedly telling clients to "eliminate or lighten positions" ahead of year-end rebalancing
The numbers are stark:
1. Spot Bitcoin ETFs offloaded $2.8 billion in the past month
2. Daily inflows have collapsed to as low as $1 million
3. Open interest in perpetual futures dropped from $94B to $68B
ETF investors receive quarterly reports, benchmark comparisons, and updates from the risk committee. LTHers have conviction and cost bases less than $10,000. There's no contest. As one analyst noted, "new money is cautious and there is not much urgency or rush to get invested." This institutional disengagement is precisely what's creating the current liquidity vacuum.
The $80-50k Buyback Question: The Heart of Market Structure
This is the most critical—and most uncertain—question. The answer depends on which category of LTH we're talking about:
Category 1: OG Bitcoin Maximalists (True Diamond Hands)
Likely to buy back aggressively at $50-70k. Their selling is tactical profit-taking, not strategic exit. Bitfinex analysts explicitly state this rebalancing "typically resets positioning and volatility before the next leg higher." These holders have seen 80% drawdowns before and view them as opportunities. If we see $60,000, expect significant buy-side pressure from this cohort.
Category 2: Corporate Treasury Holders (e.g., MicroStrategy-style)
Potentially out for good. Public companies bought just 14,400 bitcoin in October, the lowest monthly increase of the year. These are CFOs, not cypherpunks. If Bitcoin underperforms its cost of capital or creates balance sheet volatility, it'll exit permanently. The inventory they're selling now may not be repurchased—especially if the "digital gold" narrative continues to fray.
Category 3: Institutional LTHs (Early ETF adopters, family offices)
50/50 split. Some will treat $60-70k as a value play. Others, burned by volatility and benchmark underperformance, will rotate permanently to Nvidia and tech stocks. The key variable is whether the Fed pivots to easing, which would reignite institutional interest. If macro remains tight, this capital may be gone for the cycle.
The Critical Signal: Which LTHs Remain?
The on-chain data shows "whale wallets (>1,000 BTC) are gradually declining" while "retail cohorts (<1 BTC) have seen an uptick." This suggests a transfer from institutional-size holders to smaller, more committed holders—a classic bottoming signal. But there's a concerning twist: the 815,000 BTC sold by LTHs in 30 days is historically extreme. When even the most patient holders are selling, it signals either:
- A final capitulation before accumulation (bullish)
- A permanent reduction in the LTH base (structurally bearish)
The truth is probably both: weak LTHs are exiting permanently, while strong LTHs are reloading for the next cycle.
My Best Assessment
- ETF fatigue has already arrived and will intensify if we break $93,000. This capital is not coming back until we see new ATHs.
- LTH selling will slow between $90-95k and reverse below $85k. The OGs will buy back at $60-70k.
- Corporate LTHs are the real risk—they may be exiting for good, and their selling is masking underlying demand erosion.
If Bitcoin reaches $50-60k, expect a bifurcated response: OGs and die-hards accumulate aggressively while institutional LTHs stay on the sidelines, waiting for confirmation of a new macro catalyst. The market is essentially going through a conviction purification ritual. The question isn't whether diamond hands will buy back—it's whether there will be enough of them left to drive the next parabolic move.
Until next time, The Dark Sage singing out ✌️
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