Long-Term Bitcoin Holders Reduce Supply as Futures Activity Surges and Price Consolidates

• Long-term Bitcoin holders reduced 250K BTC as prices surged past $90K.
• Bitcoin futures open interest hit $60B, signaling rising leverage and market risk.
• Intraday volatility on May 4 hints at liquidations amid shallow recovery attempts.

Bitcoin’s price strength through early 2025 is being driven by changing behavior among long-term holders and increasing speculative activity in derivatives markets. According to on-chain data from Glassnode, long-term holders (LTHs) have reduced their supply by approximately 250,000 BTC since October 2023. The shift has coincided with a sustained rise in Bitcoin’s price, which recently climbed past $90,000 before facing intraday volatility.

The decline in LTH supply began in late 2023, shortly after Bitcoin’s price started climbing. The reduction indicates that long-term investors who had accumulated BTC during previous cycles began offloading assets during the price rally. Data shows a clear inverse relationship between price and LTH holdings. While the BTC price (black line) continued to surge, the LTH supply (orange line) declined steadily.

The LTH supply peaked around October 2023, marking the end of an accumulation phase. Since then, the market has seen a redistribution of holdings. By March 2025, Glassnode identified a renewed “Accumulation Zone” as strategic investors began re-entering the market. This change suggests that a new wave of buyers is replacing early profit-takers amid price consolidation.

Spot Market Records Modest Decline on May 4

On May 4, 2025, Bitcoin’s price action showed signs of intraday instability. The asset dropped by 0.77% to close at $95,456.87 after briefly touching $96,200 earlier in the session. CoinMarketCap data indicates that Bitcoin’s market capitalization fell slightly to $1.89 trillion, while 24-hour trading volume declined 8.09% to $15.81 billion.

Intraday charts also indicated huge swings between 2:00 AM UTC and 12:00 PM UTC demonstrating possible liquidation events or sudden repositioning of derivatives positions. Attempts at upward recovery remained shallow through the day, yet temporary support was around $95,200.

Currently, circulating supply of Bitcoin is at 19.86 million and is close to hard cap of 21 million. The broader institutional demand and continued activity around spot Bitcoin ETFs contribute to a fully diluted valuation (FDV) of $2 trillion.

BTC Futures Open Interest Approaches Peak Levels

The Bitcoin derivatives market continues to register heightened engagement. As for March 2025, Coinglass shows futures open interest dully exceeding $60 billion, which is close to all time highs. It demonstrates that BTC price and open interest were also parallel increasing since October 2024 when the first breakout was made above $35,000.

Between August to December 2023, open interest was low below $15 billion. Early 2024 surge was due to the momentum lag created by ETF approval continuing combined with what the numbers paint of improving macroeconomic conditions. This represents how institutions are hedging and trader speculation of Bitcoin’s price realization.

A rising open interest is often seen as a vote of confidence in the market, but it does surely increase the potential downside risk. The high leverage levels also mean corrections on prices if liquidation cascades happen. Funding rates and macroeconomic indicators are closely watched by analysts in order to determine how much the current leverage can be sustained.