On-chain analysis week 36/2026: Long-term Bitcoin investors have returned

Analyst Research Team

Group On-chain HCCVenture

Market Summary

Following a short squeeze in mid-August, BTC recovered to above $80,000 and reached a short-term peak of around $82,100-$82,200. Currently, this structure doesn't appear to be a systemic weakening, but rather a testing of supply above after the market experienced a rapid revaluation. When BTC was trading around $78,000 in May, only about 65% of the circulating supply was profitable .

The cost basis for Short-Term Holders is currently determined by HCCVenture to be around $71,000; therefore, a price close to $80,000 is creating a relatively wide profit margin for new investors. However, this profit margin also creates potential liquidity on the selling side as the market enters a long-term supply zone.

According to data from September 3rd, approximately 69.2% of the supply held by Long-Term Holders is profitable , while only 18.7% is in a loss-making state . The percentage of STH holdings experiencing losses is only about 0.17% of the supply , indicating that selling pressure from short-term investors trapped at high prices has decreased to almost negligible levels. This is a qualitative change compared to previous correction phases, as the market no longer has to absorb a large amount of supply forced to sell below cost.

At approximately 1.53 , this means the market value of BTC is about 53% higher than the realized value of the measured supply. However, this is still significantly lower than the extreme pricing states that occurred in the later stages of previous cycles.

During the short squeeze in August, the 25-delta 7-day skew surged as investors collectively sought call options above. After BTC hit a supply zone, the indicator quickly returned to near neutral. The option structure was also significantly influenced by the September 25th expiration , with approximately $14 billion in open interest on Deribit and IBIT. The concentration of such a large amount of open interest in such a near expiration date could increase price sensitivity to large strike zones and make the market more prone to strong volatility as the expiration date approaches.

The yield on 10-year US Treasury bonds rose to around 4.8% , reaching its highest level since late 2023. Following the August jobs report, the US economy added 162,000 jobs , significantly higher than expected, while the unemployment rate remained at 4.1%. Interest rate markets therefore raised the probability of a Fed rate hike at its September meeting to around 57–59% after the jobs data. For Bitcoin, high real and nominal yields increase the discount for risky assets, while reducing the incentive to expand valuations based on liquidity.

Analyzing on-chain metrics

In the current cycle, volatility is no longer maintaining historically extreme levels, despite Bitcoin experiencing significant price swings . Data from HCCVenture shows realized 30-day volatility at 45.56% , indicating that short-term volatility is currently higher than medium-term volatility, reflecting a significant increase in range in recent weeks following previous compression. Compared to historical extremes, 45-46% is still significantly lower than the volatility peaks exceeding 100% that occurred during the most stressful market periods.

Specifically, in August 2026, realized volatility dropped to around 27.2% , according to data released by VanEck on August 18th. This was a very low level in Bitcoin's history and coincided with a decline in spot trading volume. A few days later, a strong price surge pulled 30-day volatility back above 40%, demonstrating that the market had just emerged from a volatility compression phase , rather than entering an extreme volatility mode.

• A volatility increase from around 27% to 45% does not necessarily mean market risk has returned to extreme levels; it simply indicates that recent volatility has increased sharply from its previous lows. Meanwhile, periods above 80–100% historically have typically occurred when the market was simultaneously experiencing liquidation, panic selling, or highly leveraged speculation.

Bitcoin is shifting from volatility compression to volatility expansion, but current volatility levels remain below historical extremes. The realized 30-day volatility increase from approximately 27.2% in mid-August to 45.56% in early September suggests the market has entered a new volatility phase, but there are no signs of panic or extreme speculation. This is a positive sign for a cyclical structure because volatility is expanding concurrently with the price recovery and has not yet been accompanied by the extreme volatility seen at major peaks or troughs.

The Bitcoin 1-Year Change in Whale Holdings track the change in the amount of BTC held by large wallet groups over a 12-month cycle. The chart focuses on the group holding between 1,000 and 10,000 BTC , currently leaning towards a neutral-positive cautious outlook for Bitcoin's valuation , but not strong enough to confirm a sustained bull run based solely on whale behavior. A distribution of approximately 188,000 BTC over 12 months represents a significant structural hurdle, but is well below the extreme end of the 2022 cycle.

More importantly, the 50,500 BTC decline in the 1,000-10,000 BTC pool since the end of June is occurring concurrently with the pool holding over 100,000 BTC absorbing approximately 59,100 BTC , suggesting that supply is being restructured rather than simply being dumped onto the market.

Therefore, the current Bitcoin valuation is not yet supported by a complete whale accumulation cycle, but it also no longer exhibits the characteristics of an extreme distribution phase, and the current trend is shifting from distribution to selective accumulation, a more favorable foundational structure for price compared to the early 2026 period. However, to sustainably confirm a higher valuation, the market needs to witness a clear reversal of the 1-year change in BTC volume in the 1,000–10,000 BTC group and, in particular, the 365-day SMA ceasing its decline.

Bitcoin Cycle Momentum indicates that cyclical momentum has entered a historical bottom, but the reversal confirmation process is not yet complete. The current data suggests the indicator has undergone a similar decline to previous cycles, reaching the -30 region in June 2026. This is a significant extreme level when compared to the 2013-2026 history: regions around -30 have appeared during periods of deep downward pressure for Bitcoin before entering long-term recovery phases. However, methodologically, the indicator reaching a historical bottom only confirms that the downward momentum has reached an extreme state ; it does not itself confirm a new upward cycle.

The recovery of Cycle Momentum from around -30 to the -11.4 region indicates that the depth of the downward momentum has been significantly absorbed , while Bitcoin's return to the $80,000-$82,000 range demonstrates that demand is strong enough to revalue the asset from its previous bottom. Much of the downward momentum of the cycle has been released, but the new upward momentum has not yet reached a level strong enough to establish a new acceleration phase.

Bitcoin has passed through the extreme weakness zone of the cycle and is in the process of rebuilding momentum, but the market has not yet reached the quantitative conditions to confirm a new bull cycle. The most important signal in the next phase is the shift in Cycle Momentum. If this process occurs simultaneously with Bitcoin maintaining above the $80,000-$82,800 range, the probability of forming a higher valuation level will significantly increase; conversely, a return of the indicator to the -30 region would negate the current recovery and reactivate the weakening structure of the cycle.

The Bitcoin Daily Realized Profit/Loss Ratio reflects the correlation between the realized value of Bitcoin in profitable and losing states, and currently shows that the structure has changed significantly compared to the strong growth phase of 2024-2025. After Bitcoin established a peak above $100,000 , the Realized Profit/Loss Ratio no longer maintained sustained highs as in previous bull phases. Instead, the indicator consistently showed periods of sharp declines, with Capitulation Pressure zones becoming evident from the beginning of 2026.

The data shows that selling pressure is clearly evident around the price levels of approximately $60,000-$70,000 , whereas similar situations have previously occurred around $20,000 in 2022 , around $30,000-$40,000 in 2020-2021 , and lower price levels during the 2018-2019 cycle.

In previous cycles, major bottoms were often accompanied by a combination of sharp price declines, Realized Profit/Loss Ratio approaching or falling below equilibrium for extended periods, and significant increases in realized losses. The market only formed a sustainable base after large-scale liquidation of high-priced buy orders. However, this characteristic is not fully present in the current structure.

The appearance of Capitulation Pressure zones on the chart should be interpreted as a sign of marginal supply clearing , rather than evidence of a final cyclical bottom. The market is forcing holders with high cost basis and low volatility tolerance to reposition themselves, while those with lower cost basis are able to continue holding. This mechanism typically helps to gradually reduce weak supply and allows the market to establish a new equilibrium zone.

The Bitcoin Futures Long–Short Liquidations Dominance chart shows the imbalance between the liquidation of long and short positions in the derivatives market, directly reflecting the level of leverage used and the direction of the deleveraging process. The data on the chart indicates that the Bitcoin market is currently entering a cyclical deleveraging phase , with a significant increase in the frequency of liquidations from late 2024 and especially in 2025–2026. However, the scale of current liquidations has not yet reached the historical peak of the 2021 period.

According to data from HCCVenture, the frequency of liquidation increases sharply as Bitcoin enters periods of high volatility , especially from 2024 onwards. During the 2019–2020 period, liquidation events were generally low-scale and relatively dispersed. Conversely, from 2024, the density of liquidation events increases significantly, reflecting the rapid expansion of the futures and perpetuals markets.

The recent short squeeze eliminated some of the short positions betting on a downtrend, while also making the derivatives market less asymmetrical. However, Bitcoin's return to near $80,000 after the squeeze also means the liquidation risk is gradually shifting to the long side if the price fails at the current resistance level .

Total sell-side liquidity on the chart has formed a clear downward trend since the 2024–2025 period, which is particularly important because the liquidity on the sell side is now significantly lower than during periods when Bitcoin was at the same or higher price levels in the previous cycle. In other words, the supply of Bitcoin available for trading on exchanges is becoming increasingly thin , while the price has returned to the region near $80,000.

Compared to the beginning of 2024, when sell-side liquidity remained high and the market was able to absorb large buy orders without causing excessive volatility, the current structure is completely different. Sell-side liquidity has continuously declined while Bitcoin remains in a high valuation range.

More noteworthy is the Accumulator Addresses Demand , which shows the amount of BTC change in the balance of the accumulating address group over the past 30 days. On the chart, this indicator has steadily declined from its highs in 2024–2025 and is now near the lowest point of the entire observed cycle , only slightly above the extreme levels seen during periods of market weakness. Therefore, the current structure should be interpreted as “supply is scarce” rather than “demand is booming” .

If the market absorbs the supply here under conditions of improved accumulator demand, the valuation structure will shift significantly to positive, opening up the possibility of retesting higher levels. Conversely, if accumulated demand remains low, the $83-$86 thousand range will continue to act as a supply ceiling, keeping Bitcoin fluctuating within a range.

In 2025, the distribution pressure on LTH reached extreme levels. Data compiled by Fidelity Digital Assets from HCCVenture shows that the largest outflow reached approximately -185,894 BTC on August 7, 2025 , before narrowing sharply to -20,407 BTC on September 25, 2025. In the current context, the -96,296 BTC/30-day level is significantly lower than the distribution extremes seen in the cycle, indicating that selling pressure from long-term holders has not yet reached its most extreme state.

A negative Net Position Change doesn't necessarily mean all LTH is being sold off. As long as the total LTH supply remains around 14.7-14.8 million BTC , the majority of the long-term supply is still outside of regular trading activity. Therefore, the actual amount of BTC being brought back into the market is only a fraction of the total BTC in this group.

In other words, the long-term ownership structure has not been broken . The current distribution pressure mainly reflects a segment of long-term holders shifting BTC to a more active circulation state, rather than a release of supply on a scale large enough to completely reverse the long-term scarcity structure.

On the chart, the LTH supply experienced a significant decline in 2025-2026 before bottoming out and recovering strongly. This is a crucial feature because, in Bitcoin's on-chain model, a decline in LTH supply reflects BTC leaving the long-term investor base , while a rebound implies that the amount of new mature coins has outpaced the amount spent. Given that the price remains far below its all-time high (ATH), the recovery of LTH supply is more significant than the short-term price fluctuations themselves, as the ownership structure is shifting from releasing supply to relocking supply .

Bitcoin history shows that LTH Spending Binary typically surges in two scenarios: LTH taking profits at high valuation levels during bull markets, or LTH being forced to sell during strong capitulation phases . LTH Supply decreased sharply while Bitcoin traded significantly below its previous cycle peak in early 2026. However, subsequent data suggests this process has weakened and the market structure has begun to shift to a supply-absorbing phase.

Considering only the long-term supply aspect, the current data shows accumulation and reabsorption of supply , rather than expansion of distribution. LTH supply stands at approximately 14.74 million BTC , equivalent to roughly 73% of Bitcoin's circulating supply of 20.08 million BTC . The current level is about 72% lower than that peak capitulation, reflecting a significant decrease in forced selling pressure from long-term holders. Therefore, the most important signal is not whether LTH is being sold, but rather the slowing rate of selling while the total LTH supply recovers .

BTC Retail Investor Demand – 30D Change measures the change in Bitcoin trading demand from a group of investors with relatively small transaction sizes, defined in the chart as transactions between $0 and $10,000 . Bitcoin is currently trading around $79,800 , while Retail Investor Demand 30D Change has increased by approximately +15% to +17% , significantly above the 0% equilibrium and well above the deep downturn recorded in the previous period. Notably, this recovery comes after a prolonged period of weak retail demand, thus signifying a recovery in real demand , rather than just a short-term price fluctuation.

In early 2025, Retail Investor Demand 30D Change dropped to approximately -20% , the lowest point in the entire data shown on the chart. This means that during that period, retail investor demand declined sharply compared to the previous 30 days, while Bitcoin remained at a high price.

If retail demand has reached +25% to +30% while prices are simultaneously approaching their all-time high (ATH), the market will show clearer signs of euphoria and speculative demand growth. Conversely, at around +15% to +17%, the indicator would reflect the return of retail capital after a period of withdrawal. The current structure therefore leans towards a phase of re-expansion rather than an overheated phase.

Our assessment and conclusions

Bitcoin is in a revaluation phase after a deep correction, but the necessary conditions to confirm a new bull cycle have not yet fully formed . After falling to the range of approximately $57,800 to $62,000 in 2026 , the market has recovered strongly to the $77,000 to $78,000 range , with the late August rally mainly driven by short closing and liquidation. Recent HCCVenture data also shows that the percentage of Bitcoin supply currently holding profit at the same price range has increased from approximately 65% ​​in May to 68% at the end of August , indicating that at the same nominal price, the amount of supply capable of turning into selling pressure is now greater than before.

Bitcoin is no longer in the extremely low valuation zone of $57,000 to $65,000 , but it hasn't yet entered the overheated valuation zone of its previous peaks. The current price is situated between two distinct supply and demand structures: $62,000 to $65,000 is the accumulation base , while $83,000 to $86,000 is the supply zone above , primarily related to the amount of Bitcoin held by long-term holders.

Notably, the behavioral structure of holder groups also does not yet support an extreme end-of-cycle distribution phase. The total amount of Bitcoin held by whales has recovered from previous lows but remains significantly lower than the historical peak of the cycle; at the same time, changes in the position of Long-Term Holders over 30 days have shown significant selling. In August, Long-Term Holder Supply decreased by approximately 356,000 BTC in 30 days , reflecting a segment of long-term holders beginning to realize profits or reduce risk as the price recovered. However, this scale has not yet created a supply shock equivalent to the extreme distribution phases of previous cycles.

Specifically, the Realized Profit/Loss Ratio indicator is not currently showing a state of euphoria comparable to previous cycle peaks. In recent data, this ratio is recorded around 0.75 , significantly lower than the 2.0 threshold often considered a sign of sharply increasing realized profits and an overheated market. This suggests that profit-taking pressure exists but has not yet reached a systemic level.

If Bitcoin successfully absorbs the supply of $ 83,000 to $86,000 and sustains above this level, the on-chain structure will shift to a more clearly positive state, opening up the possibility of a revaluation to higher levels. Conversely, if it continues to fail at this supply level, the price is likely to remain within the current range and return to test lower cost basis levels. Based on the available data, the base scenario is that Bitcoin continues its accumulation and revaluation within the range, with $62,000 to $65,000 as the structural bottom and $83,000 to $86,000 as the price ceiling that needs to be broken to confirm a new uptrend .

Disclaimer

This report was prepared by HCCVenture Research with the aim of providing information, research, and market analysis. The entire content of the report is based on publicly available data, on-chain data, market data, venture capital (Venture Capital) data, macroeconomic data, and HCCVenture's internal research methodologies at the time of publication. Data sources are compiled from numerous reputable research platforms and organizations, including but not limited to Glassnode, CoinGecko, TradingView, Dune Analytics, CoinGlass, CryptoRank, RootData, PitchBook, DefiLlama, CryptoQuant, Messari, Token Terminal, Artemis, CoinMarketCap , public blockchain data, reports from financial institutions, investment funds, blockchain companies, and other publicly available information sources. HCCVenture strives to select reliable data sources and applies a verification and cross-checking process throughout its research. However, HCCVenture does not guarantee the completeness, accuracy, timeliness, or error-free nature of all data due to differences in statistical methods, data collection scope, update times, or adjustments from data providers.

All opinions, assessments, valuation models, cyclical analysis, on-chain data, capital flow analysis, Venture Capital activity, ETFs, Digital Asset Treasury Companies (DATs), technical indicators, macroeconomic indicators, and scenarios presented in this report reflect only the research views of HCCVenture Research at the time of publication, based on available assumptions and data. These contents are not investment advice, financial advice, legal advice, accounting advice, tax advice, brokerage advice, portfolio management advice, or recommendations to buy, sell, or hold any digital asset, security, financial product, investment fund, blockchain protocol, or business. The digital asset and blockchain markets are highly volatile and are influenced by global liquidity, monetary policy, regulatory regulations, macroeconomic conditions, and many other unpredictable factors. Therefore, the trends, patterns, correlations, or historical cycles mentioned in this report are not guaranteed to repeat in the future and should not be considered reliable predictions of market developments. Readers should conduct their own independent research ( DYOR – Do Your Own Research ) and consult with qualified financial, legal, tax, or investment professionals before making any decisions. Any investment decisions or actions arising from the use of information in this report are the sole responsibility of the reader.

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