Bitcoin Drops Below $111K: Whales & LTHs Initiate Selling

Bitcoin's Recent Price Dip: An On-Chain Analysis

The cryptocurrency market is an intricate ecosystem, heavily influenced by the collective actions of its participants. Recent on-chain data pertaining to the Bitcoin (BTC) network reveals a notable shift in investor behavior, particularly among its key holders. This analysis delves into the observed distribution patterns from significant investor cohorts, namely "sharks and whales" and "long-term holders" (LTHs), providing insights into the potential drivers behind Bitcoin's recent price decline to below the $111,000 mark.

Key Investor Behavior: Sharks and Whales Engage in Distribution

Understanding the movements of large investors is crucial for deciphering market sentiment and predicting future price trajectories. On-chain analytics firm Santiment has highlighted a period of net distribution among Bitcoin's key investor tiers. The "Supply Distribution" metric, which quantifies the total supply held by specific wallet segments, serves as a vital tool for this assessment.

Investor wallets are typically segmented based on their BTC holdings. For this particular analysis, the focus is on a broad range encompassing wallets holding between 10 and 10,000 Bitcoins. At current valuations, this translates to holdings ranging from approximately $1.1 million to $1.1 billion, a scale that effectively covers prominent investor groups often referred to as "sharks and whales." These entities, due to the sheer volume of their holdings, possess the capacity to significantly influence market dynamics through their buying and selling activities.

Data from Santiment indicates a substantial reduction in the Bitcoin supply held by this influential group. Specifically, between October 12th and 14th, these cohorts shed an estimated 17,554 BTC, a value approaching $1.9 billion. This concentrated sell-off occurred shortly before Bitcoin's latest recovery attempt faltered, suggesting a direct correlation between this profit-taking behavior and the subsequent bearish price action. Prior to this event, the metric had been on a consistent uptrend since late August, indicating a period of accumulation that had previously supported bullish momentum.

While the recent distribution is noteworthy, it is important to contextualize it within a longer-term perspective. Despite this recent selling spree, the cumulative holdings of these key investors have seen a substantial increase since the beginning of 2025, growing by a staggering 318,610 BTC, equivalent to approximately $35.5 billion. This indicates that the recent distribution, while impactful in the short term, represents a minor correction within a broader trend of accumulation. A similar, albeit lighter, profit-taking event was observed in late August, after which these sharks and whales quickly resumed their accumulation, subsequently underpinning a bullish rally for BTC.

Long-Term Holders (LTHs) Show Significant Outflows

Beyond wallet balance, another critical methodology in on-chain analysis involves classifying investors based on their holding duration. This approach differentiates between Short-Term Holders (STHs) and Long-Term Holders (LTHs), with a common cutoff point of 155 days. STHs are generally considered to represent the more speculative and often fickle segment of the market, typically reacting quickly to price fluctuations. In contrast, LTHs are often characterized as "diamond hands"—investors with a strong conviction in Bitcoin's long-term value, less prone to emotional selling.

However, recent data suggests even these resolute LTHs have participated in a notable selling trend. CryptoQuant community analyst Maartunn reported a significant outflow from LTH wallets. Over the past 30 days, a net total of 265,715 BTC has exited the holdings of long-term holders. This figure represents the largest monthly outflow observed from this cohort since early January, indicating a potentially significant shift in their behavior.

The substantial selling pressure from LTHs, often seen as a bedrock of market stability, is a critical development. When LTHs choose to divest, it can signal a loss of conviction or a strategic rebalancing of portfolios, potentially exerting downward pressure on price. This recent LTH distribution, combined with the earlier selling by sharks and whales, paints a clearer picture of generalized profit-taking across various influential investor segments.

The Current State of Bitcoin Price

In light of these significant distribution events, Bitcoin has struggled to maintain any upward momentum. The cryptocurrency's price has remained persistently around the $111,000 level, unable to sustain a meaningful recovery. The correlation between the observed investor selling and the stagnation or decline in price underscores the profound impact that the actions of key market participants can have on Bitcoin's valuation.

The interplay between supply distribution, holding duration, and price action highlights the complex dynamics of the Bitcoin market. While short-term fluctuations are common, sustained selling by large entities and long-term holders often signals a period of consolidation or correction. Investors and analysts will continue to monitor these on-chain metrics closely for signs of a reversal in accumulation trends, which would typically precede a more robust recovery.

Conclusion: Navigating Bitcoin's Volatility with On-Chain Data

The recent on-chain data provides compelling evidence that Bitcoin's dip below $111,000 is, in part, attributable to a period of net distribution by key investor cohorts. Both the "sharks and whales" and "long-term holders" have reduced their holdings, injecting selling pressure into the market. While the long-term accumulation trend remains intact for the largest investors, these short-to-medium-term distribution phases are crucial for understanding current price movements. As the market navigates this period, continuous analysis of on-chain metrics will remain indispensable for discerning future trends and making informed decisions in the volatile cryptocurrency landscape.