Bitcoin’s price action is entering a critical phase as on-chain data reveals one of the largest long-term holder (LTH) sell-offs since December 2024, while market analysts warn of a potential $8 billion short liquidation setup that could trigger an explosive move higher.
Long-Term Holders Take Profits
According to newest data, long-term Bitcoin investors offloaded more than 300,000 BTC, worth roughly $33 billion, during October, marking the most aggressive round of profit-taking in nearly a year.
The on-chain chart from Checkonchain shows a steep decline in long-term holder supply, signaling that many wallets which held Bitcoin for over six months have been realizing gains near the $110,000 range.
Historically, such phases of LTH distribution tend to occur near local market tops or mid-cycle transitions, when early-cycle investors rotate into cash or risk-off assets. However, previous cycles also show that these sell-offs often precede major rallies, as the market redistributes BTC to newer buyers and institutional accumulators.
Massive Short Positions on the Brink
While long-term holders are taking profits, derivative data suggests the bears might be walking into a trap. According to recent data, nearly $8 billion in short positions across major exchanges, including Binance, OKX, and Bybit, could be liquidated if Bitcoin climbs just 5% to $117,000.
This setup reflects a classic short squeeze scenario: as price rises, leveraged short traders are forced to buy back their positions, accelerating upward momentum. Similar patterns triggered Bitcoin’s rallies in March and July this year, pushing the price from $74,000 to above $100,000.
The “Gold Playbook” Comparison
Adding to the bullish perspective, market analyst Merlijn The Trader compared Bitcoin’s current price structure to gold’s 10-year breakout pattern, which culminated in its explosive fifth Elliott Wave rally.
In Merlijn’s view, Bitcoin has already completed waves 1 through 4 and is now standing on the launchpad for Wave 5, the final leg that historically marks the strongest and most vertical phase of a bull market.
He noted that just as gold broke its decade-long resistance before skyrocketing, Bitcoin’s breakout above $100,000 could set the stage for a similar parabolic run.
Key Takeaway
Despite the heavy selling from long-term holders, the market structure remains technically bullish, fueled by the threat of a massive short squeeze and growing macro comparisons to historical gold rallies.
If Bitcoin can reclaim momentum toward $117,000, it could unleash one of the most aggressive upside moves of the cycle, turning what appears to be long-term distribution into the ignition phase of the next leg higher.