For much of Bitcoin’s latest downturn, its most committed investors remained remarkably resilient. While short-term traders and speculative investors exited positions amid falling prices and growing uncertainty, long-term holders largely stayed on the sidelines, refusing to sell their coins. That trend is now changing.

Recent blockchain data suggests that some of Bitcoin’s highest-conviction investors are finally beginning to liquidate their holdings, a development that analysts believe could mark a critical turning point in the cryptocurrency’s current bear cycle. Historically, periods when even the strongest holders start selling have often occurred near the later stages of major market declines.

Long-Term Bitcoin Holders Enter the Selling Wave

According to market analysis from Compass Point, investors who have held Bitcoin for at least 155 days have shifted from months of inactivity to active selling. These long-term holders, often viewed as the backbone of Bitcoin’s investor base, were relatively quiet between February and April despite growing volatility.

That patience appears to be wearing thin.

Over the last two days alone, this group has reportedly sold approximately $2.4 billion worth of Bitcoin. Such large-scale distribution carries significant implications for market dynamics because long-term holders control a substantial portion of Bitcoin’s circulating supply.

When these investors begin selling, additional supply enters the market, increasing pressure on prices at a time when demand remains fragile.

Investors Who Bought Near the Top Are Capitulating

One of the most notable developments is the behavior of investors who purchased Bitcoin at elevated price levels.

Data indicates that roughly 26% of all Bitcoin sold during the past month came from holders who originally bought above $90,000. These investors had previously demonstrated unusual resilience throughout the market correction, maintaining positions despite significant losses.

Their recent decision to sell suggests growing frustration and declining confidence among participants who entered the market near its peak.

Market analysts often refer to this phenomenon as "capitulation"—a stage where investors who have endured months of losses finally decide to exit positions. Historically, such events frequently occur near the end of prolonged bear markets as selling pressure becomes exhausted.

The capitulation of top buyers is considered particularly important because it signals that even the most optimistic investors are beginning to surrender, a pattern observed during previous cryptocurrency market cycles.

Bitcoin Struggles Despite Strength in Traditional Markets

Bitcoin’s weakness has become increasingly noticeable as global equity markets continue pushing higher.

The cryptocurrency has struggled to regain momentum after reaching record highs above $126,000 earlier in the cycle. Ongoing geopolitical uncertainty, particularly surrounding tensions in the Middle East and concerns related to the U.S.-Iran conflict, has weighed heavily on investor sentiment.

At the same time, major stock indices have continued setting new records, creating a striking divergence between digital assets and traditional equities.

This disconnect is causing investors to reexamine two of Bitcoin’s most popular investment narratives.

The first is Bitcoin’s reputation as "digital gold"—an asset expected to perform well during periods of geopolitical uncertainty and macroeconomic stress. The second is the idea that Bitcoin behaves like a high-growth technology asset that benefits when risk appetite is strong.

Recent price action has challenged both arguments, leaving investors searching for a clearer catalyst to drive the next major move.

ETF Outflows Continue to Weigh on Demand

Another major factor pressuring Bitcoin prices is the ongoing withdrawal of funds from spot Bitcoin exchange-traded funds (ETFs).

Bitcoin ETFs recently recorded their longest streak of net outflows on record, extending to 11 consecutive trading days. These investment vehicles have become one of the most important sources of institutional demand since their launch, making sustained outflows a significant concern for market participants.

The importance of ETF flows cannot be overstated. Institutional capital entering or leaving these products often has a direct impact on Bitcoin’s price trajectory because of the scale of assets involved.

As investor appetite weakens, ETF providers are seeing more redemptions than inflows, creating another headwind for the cryptocurrency market.

Sharp Weekly Losses Trigger Liquidations

Bitcoin has fallen roughly 10% over the past week as risk-off sentiment spread across the market.

The decline accelerated after a wave of fear-driven selling triggered a cascade of leveraged long-position liquidations. When heavily leveraged traders are forced to close positions due to falling prices, automated selling can amplify market declines and create additional volatility.

Although some market observers initially focused on Strategy’s small sale of 32 Bitcoin, analysts generally agree that the transaction itself was too minor to meaningfully influence the broader market.

Instead, the sharp drop appears to have been driven primarily by deteriorating sentiment, weak institutional demand, and the broader risk-off environment.

Institutional Demand Remains the Key Driver

Many analysts continue to view ETF flows as the most important indicator for Bitcoin’s near-term direction.

Research from major financial institutions suggests that ETF activity accounts for a substantial share of Bitcoin’s weekly price movements. When inflows are strong, prices tend to rise rapidly. When outflows accelerate, downward pressure often follows.

The recent weakness in ETF demand has therefore become a major concern for investors hoping for a quick recovery.

Adding to uncertainty is the slowing momentum behind potential U.S. cryptocurrency market structure legislation. Many investors had hoped clearer regulatory frameworks would encourage greater institutional participation and unlock a new wave of capital entering the sector.

Without meaningful progress on regulation or a renewed surge in ETF inflows, analysts believe investor enthusiasm could remain subdued.

What This Means for Bitcoin’s Next Move

While current market conditions remain challenging, some analysts see a potential silver lining in the recent capitulation among long-term holders and top-cycle buyers.

Historically, major bear markets often reach their final stages when even the strongest believers begin selling. The logic is straightforward: once the majority of willing sellers have exited the market, downward pressure eventually begins to fade.

That does not necessarily mean a rapid recovery is imminent. Bitcoin still faces significant obstacles, including weak ETF demand, geopolitical uncertainty, regulatory concerns, and lingering investor caution.

However, the emergence of large-scale capitulation among previously resilient holders may suggest that the market is progressing toward a more mature phase of the correction. If institutional demand stabilizes and broader sentiment improves, Bitcoin could eventually find a foundation for its next major recovery cycle.

For now, investors are closely watching ETF flows, regulatory developments, and on-chain holder behavior for signs that the cryptocurrency market's prolonged period of weakness may finally be approaching its conclusion.