By Key Points
- Bitcoin Distribution Phase Triggers Panic as Investors Sell Off
- Bitcoin is in a prolonged distribution phase, per Glassnode.
- Investors are liquidating holdings rather than accumulating.
- Market sentiment has turned cautious amid macroeconomic risks.
- Analysts see potential stabilization as long-term selling slows.
Bitcoin (BTC) is going through a critical shift. According to Glassnode, the crypto market has entered a prolonged distribution phase, signaling increased selling pressure. Since January 2025, Bitcoin’s price correction from $108,000 to $93,000 has triggered a wave of sell-offs, leading to a decline in accumulation.
Bitcoin Accumulation Trend Score. Source: Glassnode – Techtoken
Glassnode’s Accumulation Trend Score has fallen below 0.1, indicating that most investors are offloading their BTC instead of holding or buying more. This suggests weaker demand, increasing downward pressure on prices.
More concerning is that this trend is visible across all wallet sizes. Small and large investors alike are distributing Bitcoin, intensifying sell-side pressure. Since mid-January, selling activity has accelerated, particularly among those who are offloading their coins at a loss.
Bitcoin Distribution Across Wallets. Source: Glassnode – Techtoken
“This market downturn has proven challenging for many investors. A significant number are exiting the market below their cost basis, reflecting panic selling,” Glassnode stated.
Meanwhile, concerns about money laundering in the crypto space have also been rising. Suspicious trading activities linked to Hyperliquid have sparked fears that illicit funds are being funneled through decentralized platforms. Read more here.
The #Bitcoin market has shifted into a distribution phase at the turn of the year, with Accumulation Trend Score currently at 0.21. This suggests net selling across most holder cohorts: https://t.co/uQzUSqAQvx pic.twitter.com/SBy0ZGvOiS
— glassnode (@glassnode) January 8, 2025
Investor Confidence Sinks as Risk Factors Grow
Investor sentiment has taken a hit due to external risks. The Bybit hack and rising U.S. tariff tensions have fueled uncertainty, making market participants more cautious. Initially, Bitcoin buyers supported prices in the $95,000–$98,000 range, but by late February, liquidity tightened. This led to a loss of confidence in accumulating more BTC.
“The absence of dip-buying at lower levels suggests a capital rotation. This could result in a prolonged consolidation or correction before BTC finds strong support,” Glassnode explained.
Regulatory challenges are also adding to investor unease. Recently, the U.S. House voted to overturn the IRS DeFi broker rule, a move that could reshape tax obligations for crypto investors. Find out more here.
Meanwhile, a growing number of traders have suffered sandwich attack losses, exposing weaknesses in decentralized finance (DeFi) security. Check out the details.
Can Bitcoin Find Stability?
Despite recent volatility, some analysts believe BTC is nearing a bottom. On-chain expert Axel Adler noted that long-term holders have slowed their selling activity. This could indicate that BTC is approaching a price floor, potentially setting the stage for a future rally.
“This reduction in supply often signals the beginning of a stabilization phase, which could lead to a new market cycle,” Adler posted on X.
The largest distribution of BTC by long-term holders in recent years has ended. Activity metrics have shifted from high (selling) to low (accumulation).
This reduction in supply typically precedes stabilization and a new market cycle, representing a potentially positive market… pic.twitter.com/vvQ9V9acgq
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) March 9, 2025
Meanwhile, Bitcoin’s price action remains unpredictable. After dipping below $80,000 amid recession fears, it rebounded to $83,424, gaining 2.0% in the last 24 hours.
Another factor influencing Bitcoin’s price is U.S. inflation trends. Recent reports indicate inflation has dropped to 2.8%, leading to renewed optimism in the crypto market. Learn more.
Bitcoin Distribution by Long-Term Holders. Source: X/AxelAdelJr – Techtoken
Adding to the uncertainty, U.S. crypto airdrop losses have exceeded $5 billion due to geoblocking restrictions. This issue has significantly impacted investor participation in token distributions. Read the full report.
At the same time, Bitcoin’s role in global finance is growing, with discussions about a strategic BTC reserve under Trump’s potential administration gaining traction. See the latest updates.
As BTC navigates this challenging phase, the market is closely watching whether long-term holders will drive a reversal or if selling pressure will continue to weigh on prices.
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