On-chain analysis week 43/2026 : Selling pressure weighs heavily, but LTH remains resilient

Analyst Research Team

Group On-chain HCCVenture

Market Summary

Inflows into US Bitcoin Spot ETFs are showing a significant decline in intensity. Over the last two weeks of the period, total net inflows reached only about $67 million. At this level, market sentiment remains unsettled, and no stable capital allocation trend has formed, despite previous large-scale net buying sessions.

The distribution of Bitcoin's cost basis shows that a significant amount of supply is concentrated at prices higher than the current market price. According to the data provided, the group of long-term holders (LTH) own approximately 4 million BTC purchased in the $85,000-$118,000 range, mostly in 2025. More than half of this group's BTC was purchased at prices higher than the market price at the time of reporting.

Conversely, the cost structure of short-term holders (STH) is concentrated below market prices. The largest concentration zone is around $77,000, while another cluster of costs formed around $64,000, corresponding to the bottoming phase in 2026.

One-month realized volatility has fallen to around 25%, significantly lower than the typical volatility range of the previous year and back to levels comparable to the summer of 2023. If volatility continues to remain low, a significant change in monetary policy or capital flows could trigger a more dramatic price shift. In this case, the FOMC meeting on October 28th is an event that could potentially alter market expectations at the time the news release is made.

The realized profit/loss ratio decreased from approximately $630 million to $27 million, equivalent to nearly 95.7%, indicating that the scale of realized losses has narrowed significantly compared to August. This is evidence that sell-offs at losses are gradually decreasing. In other words, each time Bitcoin has corrected since August, the number of investors accepting to realize losses has tended to be smaller.

Analyzing on-chain metrics

Considering the entire data series from 2017 to 2026, the Realized P/L Ratio shows that spikes exceeding Level 4 often occur during periods of strong profit realization, while Bottom Alert signals are indicated in areas where the market has undergone significant corrections.

However, the period from 2024+ to the present shows that the market is exhibiting conditions that may be related to a supply-demand rebalancing phase. The Realized P/L Ratio peak is noted at around 960, the highest of the three historical peaks marked on the chart. Compared to the two previous cycles, this level is approximately 12.9% higher than the peak of 850. The fact that the indicator reached its highest level in observed history suggests that the scale of realized profits increased significantly during the period when the market reached high price levels.

During the 2018–2019 period, warnings appeared when the price of BTC dropped sharply from the cycle peak and entered a consolidation phase. A similar structure was observed at the end of 2022, after Bitcoin experienced a prolonged decline. By 2026, the chart continued to show a cluster of signals at prices significantly lower than the previous cycle peak. The repetition of these signals during correction phases suggests that the indicator is designed to identify market conditions that are likely approaching a cycle bottom.

Meanwhile, Bottom Alert clusters appear during periods of deep corrections, including 2018-2019, late 2022, and 2026. For the current market, this signal leans towards the possibility that Bitcoin is undergoing a rebalancing process after a correction, but there is not enough basis to confirm that the bottom of the cycle has been established.

The Bitcoin Daily Realized Profit/Loss Ratio recorded increasing loss pressure in early 2026. In January 2026, the indicator was marked at a P/L of approximately 1.0, suggesting that profits and losses were relatively balanced, and the market had not yet shown a clear dominance of profit-taking or stop-loss selling.

Just a few months later, a second wave of capitulation occurred, with the Realized P/L ratio continuing to fall below 1 and approaching 0.3, marking a renewed increase in realized losses. At the same time, Bitcoin's price declined from above $70,000 to the $58,000-$60,000 range, indicating that selling pressure remained significant after the May recovery.

However, the indicator's recovery in September-October needs to be evaluated in conjunction with price movements. The increase in the ratio to 2.8 while Bitcoin recovered to the $85,000-$86,000 range suggests that a significant amount of profit was realized during the rally. This reflects improved profitability, but also indicates increased profit-taking supply as prices moved higher. When the ratio declined again at the end of October, along with BTC price corrections to the $80,000 area, it can be concluded that the profit-taking momentum weakened compared to mid-month, although there is no chart evidence yet to suggest the market has returned to capitulation.

Retail investors are increasing the pressure to distribute Bitcoin since July 2026. Retail holdings have been steadily declining, reaching approximately 1.688 million BTC. This represents a decrease of about 36,000 BTC, or nearly 2.1%, compared to the peak holdings in July. This is a notable shift, given that the distribution is occurring while Bitcoin remains significantly higher than its mid-year lows.

• This development suggests that retail investors are reducing their exposure to Bitcoin after a previous accumulation phase. The continuous decrease in holdings over the final months could reflect profit-taking, a reduction in asset allocation, or portfolio restructuring in response to market volatility.

In contrast to the trend among retail investors, the amount of Bitcoin held by large investors tended to increase for most of the observation period, reaching approximately 16.89 million BTC, corresponding to a recorded net purchase of around 284,000 BTC.

Notably, the increase in holdings became more pronounced from August 2026, coinciding with the period when the amount of BTC held by retail investors began to decline. While the retail group's holdings fell from a peak of 1.724 million BTC to 1.688 million BTC, the holdings of large investors increased to their highest point in the data series. This contrast suggests that the supply of Bitcoin is trending towards a greater concentration in the hands of larger-scale holders.

From a market structure perspective, the continued increase in holdings by large investors while retail investors reduce their holdings is a positive sign for the medium-term supply and demand outlook. The accumulation by large-scale investors is likely to absorb the amount of BTC being distributed, and also indicates that large-capital entities maintain a need for exposure to Bitcoin during market corrections.

From a cyclical perspective, the BTC Growth Rate Difference currently remains in a zone reflecting relatively high selling pressure, as the difference between the growth rate of Market Cap and Realized Cap has not yet returned to positive territory. The Bitcoin price recovery in 2026 has not been fully consolidated by a corresponding increase in capital inflows on the network. In other words, market value has remained at a large scale, but the quality of capitalization growth still needs to improve through the participation of new capital inflows and more sustainable accumulation activities.

However, a noteworthy signal is that the current negative deviation has narrowed significantly compared to historical extremes. In the 2015, 2019, and 2022 cycles, the indicator experienced much deeper declines before the market formed significant recovery phases. Meanwhile, the current negative level only fluctuates around -0.001 to -0.0015 and is trending closer to the neutral zone.

• The selling pressure has decreased in intensity, reflecting that the market is no longer in a state of severe imbalance like in previous deep recessions. Therefore, the appropriate assessment of Bitcoin now is that the relative selling pressure is decreasing, but the upward momentum in market capitalization has not yet been confirmed by a corresponding expansion of realized capitalization.

In the near future, the key signal to watch is the possibility of the indicator crossing back above the zero line and stabilizing in positive territory. If this occurs simultaneously with an improvement in Bitcoin's price, it would be positive evidence that the market capitalization expansion is being better supported by actual capital flows, thereby reducing relative selling pressure. Conversely, if the deviation continues to widen below the current zone, especially as it approaches the deep negative levels recorded in previous downtrends, the risk of distribution and structural weakening of the market will increase.

Observing data from 2016 to October 2026, the supply of LTH has tended to expand in the long term, from approximately 12 million BTC at the beginning of the chart to around 17 million BTC at present. Although there have been significant declines during periods of strong growth, the overall trend still shows that the amount of Bitcoin held long-term is increasingly accounting for a larger proportion of the total circulating supply.

The current Bitcoin supply structure shows a clear improvement towards long-term holders. With the supply of LTH at approximately 17 million BTC, while the supply of STH has decreased to around 3 million BTC, the market is demonstrating a greater concentration of supply among long-term holding investors. Compared to the periods of strong distribution in 2018 and 2022, the current structure does not show a comparable decline in LTH supply.

One notable factor is that the supply of LTH is recovering while the supply of STH is shrinking. This combination typically reflects the absorption of supply after periods of price volatility, and also suggests that some BTC has been held long enough to shift to the long-term holding group. Structurally, this is a positive development for Bitcoin's supply base, as the amount of asset available for short-term trading is lower than during previous STH supply expansion phases.

The Bitcoin inflow from long-term holders to exchanges (Long-Term Holders Exchange Inflow) indicates that distribution pressure from long-term investors has significantly decreased compared to the peak period of May-July 2026. The narrowing of the 30-day moving average from around 6-8% to 3.2% reflects a slowing rate of Bitcoin transfers to exchanges, which is a positive signal for the short-term supply structure, as the amount of BTC entering the trading environment from long-term investors is no longer as high as during the previous correction phase.

However, the 3.2% level is still higher than the 1-2% support level during periods of relatively low LTH (Long-Term Asset) cash flow to the stock exchange. This suggests that the market is currently experiencing reduced but persistent selling pressure from the LTH group, rather than a complete shift to a phase where long-term supply is tightly locked. In particular, the increase in cash flow during May-July 2026 indicates that long-term investors still have the potential to create significant supply pressure during sharp market corrections.

If this development occurs simultaneously with Bitcoin holding firm at key support levels, the market will have further grounds to confirm that the distribution pressure from the long-term holding group is being absorbed. Conversely, if the indicator returns to the 6-8% range or higher, especially in the context of continued price weakness, the increased supply risk from long-term holders will become a factor putting pressure on Bitcoin's recovery potential.

Miners' Balance data reflects a declining trend in the supply of BTC held by miners. Compared to the peak of approximately 350,000-380,000 BTC in 2021, the current balance is only around 170,000-190,000 BTC, equivalent to a reduction of almost half. Notably, this downward trend is expected to continue into 2025-2026, indicating that the distribution of mining activity shows no clear signs of reversing in the long term.

A reduction in miners' BTC holdings could potentially add supply to the market, especially during times when mining revenue is under pressure from operating costs, network difficulty, and block rewards after Halving events. However, the actual impact depends on the amount of BTC transferred to exchanges, the selling rate, and the absorption capacity of spot demand.

This development suggests that the supply controlled by miners has narrowed significantly, and distribution remains dominant in recent times. This is a factor to watch when assessing Bitcoin supply pressure, especially as the market seeks strong enough demand to absorb the amount of BTC being put back into circulation.

During the 2017 cycle, Bitcoin experienced several corrections with increasingly larger magnitudes as it progressed further after its peak. Notably, the sharpest decline occurred around days 290-360, with drawdowns at times reaching -60% to -66%.

For the 2020 cycle, the deepest correction occurred around day 200–220, with a drawdown of approximately -53%. After hitting this bottom, the decline gradually narrowed and a significant recovery occurred in the following days.

Meanwhile, the 2024 cycle shows a significantly milder correction structure. The deepest drawdown on the chart occurs around days 145–155, corresponding to the -27% to -29% range. After this period, Bitcoin recovered and maintained a lower decline for most of the remainder. At the end of the chart, around day 365, the drawdown was approximately -17% to -18%. Thus, the current correction is significantly lower than the low of approximately -53% in the 2020 cycle and approximately -66% in the 2017 cycle.

In terms of market structure, this development suggests that the price dips in the current cycle have not created a level of weakness equivalent to the deep corrections seen in history. The fact that Bitcoin has maintained a relatively close distance to its peak price for most of the observation period indicates that the price structure remains more stable than in the previous two cycles.

Pressure to absorb losses increased during the correction at the end of October, right after Bitcoin recovered to the $80,000-$81,000 range on October 27-28, with BTC transfers to exchanges continuing to record significant positive profits. However, the recovery did not last long.

Simultaneously, the STH P&L index recorded significant fluctuations in both directions. Positive profit columns appeared during the recovery phase, but large negative loss columns continued to be recorded, including a drop of nearly -5,000 at the end of the period. This distribution suggests that profit-taking activity tends to increase during recovery phases, while selling pressure increases when the market weakens. This characteristic reflects the instability in the sentiment of short-term investors.

The significant losses that occurred around the end-of-month price dips indicate increasing selling pressure from the STH group, while the recovery phases have not yet created price stability. Therefore, the current data leans towards a cautious outlook, with short-term supply pressure remaining present.

Bitcoin Short-Term Holder Realized Profit and Loss data reveals a significant shift in the profitability of short-term investors in 2026. At the beginning of the year, the index recorded deep losses of approximately -25% to -30%, reflecting increased selling pressure during Bitcoin's correction. Compared to the peak of around -40% in 2022, the current loss pressure is lower, but still indicates that a segment of short-term investors have experienced significant losses.

By the end of October 2026, the index had returned to positive territory, with current estimates ranging from +10% to +17%. This represents a significant improvement compared to the deep losses earlier in the year. However, this profit level still hasn't exceeded +20%, and is considerably lower than the peaks of over +40% in 2023–2024.

Therefore, the current data leans towards a controlled recovery, not yet showing extreme profit-taking pressure from the STH group. In the near future, if the index remains above 0% and Bitcoin price stabilizes, it will reinforce the view that short-term investor profitability is improving. Conversely, if the index returns to negative territory, especially when approaching the -20% threshold, it will be a warning sign that pressure to realize losses is increasing again.

On the other hand, the Bitcoin OTC balance associated with miners is in a long-term decline and has moved toward its lowest point since 2016. From a peak of approximately 550,000 BTC in 2021 to 129,900 BTC at the end of the chart, the balance size has shrunk by about 76%. Notably, the more than 50% drop since the beginning of 2024 suggests this trend is likely to continue during a period when Bitcoin maintains significantly higher prices than in previous cycles.

• A lower OTC balance means that the amount of Bitcoin within the monitored balance range of this channel has decreased significantly. A decrease in balance does not necessarily mean that the entire corresponding amount of Bitcoin has been sold to the spot market. The change may be influenced by asset transfers, transaction settlements, wallet reallocation, or changes in custody scope.

If the shrinking trend continues, the scale of available supply through the OTC channel may become more limited than in the 2018-2021 period. However, it cannot be concluded that selling pressure from miners has decreased accordingly, as the balance index does not directly measure the amount of Bitcoin sold or transferred to exchanges.

Assessment and Conclusion

Bitcoin is currently consolidating within a relatively narrow range, as new demand is not yet strong enough to create a sustainable uptrend. After repeatedly failing to maintain upward momentum in the $84,000-$85,000 range, BTC has returned to trading around the $80,000-$82,000 area. This development reflects a weakening of buying momentum, especially as capital inflows from US Spot ETFs have not yet formed a stable net inflow trend.

Despite weak demand, realized profit and loss data suggest that selling pressure is gradually decreasing. The Realized Profit/Loss Ratio also recorded a level of approximately 2.8 on October 17th, higher than the equilibrium threshold of 1, reflecting that realized profits still prevailed at that time. However, the decrease in selling pressure does not necessarily mean that demand has recovered; the market is currently mainly supported by holding positions and the limited extent of selling activity.

Data from Retail and Large Investor Holdings shows that holdings by large investors increased to approximately 16.89 million BTC, with purchases recorded on the chart around 284,000 BTC, while retail holdings decreased from a peak of approximately 1.724 million BTC to 1.688 million BTC. This divergence suggests that supply is trending away from the retail group while large investors are increasing their holdings.

Furthermore, the Long-Term Holder and Short-Term Holder Supply charts show that long-term supply still accounts for the majority of circulating Bitcoin, while short-term supply is significantly lower. However, Long-Term Holder Exchange Inflow data indicates that BTC transfer activity by long-term holders increased sharply during the mid-2026 period, with the 30-day moving average currently declining to around 3.2–3.8% on the chart.

The increased holdings of large investors, the narrowing of realized losses with each correction, and the sharp decline in OTC balances all indicate that selling pressure is no longer as strong as during previous periods of tension. However, the unstable ETF inflows, the continued negative Growth Rate Difference, the weakening altcoin market breadth, and the inability of prices to maintain above ETF cost levels suggest that the recovery process still lacks confirmation from demand.

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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