Author: Liu Jiaolian

The smoke of tariffs in the past two days has made the market die. In the past two months, BTC has dropped from $100,000 to $80,000. 4.4 Teaching Chain Internal Reference "Market Confidence Is Being Under a Huge Test" mentioned that LTH (Long-term Holder)'s "reducing positions whenever there is a rise" cashing out greatly suppressed the market.

Different statistics give some different guidance.

According to glassnode's realized profit statistics, from November 2024 to January 2025, STH (short-term holders) accounted for 56% of profit cashing, and LTH accounted for 42%; while during the rebound from March 13 to March 25, the proportion of LTH profit cashing has reached 70%, while STH is only 10%.

However, LTH supply and STH supply statistics show that the end of last year to the beginning of this year was the stage of LTH's turnover to STH; after the decline in March, STH was cutting its losses, while LTH turned to increase its holdings.

The chips of long-term holders are the double-edged sword in the bull market. LTH is usually regarded as a market stabilizer because of its long chip precipitation cycle and strong volatility resistance. However, when the bull market enters the middle and late stages, LTH's cash-out behavior often becomes the fuse for price pullbacks.

LTH's cash-out behavior is not a simple market bearish signal, but a normal state in a bull market cycle. However, the special nature of the current market is that LTH's cash-out behavior resonates with macroeconomic pressure. The swing of Fed's expectations of interest rate cuts, escalating tariff wars and a pullback in U.S. stocks have greatly exacerbated LTH's concerns about liquidity risks. Analysts pointed out that LTH's cashout is not only a profit cashing, but also a risk-averse reaction to uncertainty.

The formation of the market bottom requires two conditions: sufficient turnover of chips and improvement of external liquidity. Currently, LTH's cashing out is accelerating the transfer of chips from "firm holders" to "short-term speculators". Although this process suppresses prices in the short term, in the long run, if STH is forced to hold for a long time after taking over at a high level (i.e., "passive LTHization"), the average market cost will gradually rise, laying the foundation for the next round of rise.

It is usually believed that, When LTH chips generally suffer losses, the market often enters a stage of "selling and selling", thus forming a phased bottom. According to analysis, the current average cost basis of LTH is about US$81,000, and the chip size is about 300,000 BTC. This makes $80,000 the "life and death line" of current BTC prices. If it breaks down, it may cause a stop loss stampede, and it may also trigger an increase in positions when the decline occurs. The market structure is currently very fragile. Trembling, walking on thin ice.

The Fed's turn could become a key catalyst. If interest rate cuts and QE (quantitative easing) restart, liquidity injection will directly benefit risky assets. BitMEX founder Arthur Hayes believes that the weakening of the US dollar caused by the tariff war and the central bank's easing may force funds to flow to BTC and gold. In addition, countries around the world may increase their monetary easing in order to hedge tariffs, further strengthening BTC's narrative of "held fiat currency depreciation".

For short-term investors, LTH's cashout wave means intensifying volatility. Long-term investors need to pay attention to two indicators: 1. The effectiveness of LTH cost support: whether BTC can stick to US$80,000 and confirm the phased bottom; 2. Federal Reserve Rhythm of implementation: The amplitude and timing of interest rate cuts will determine the scale of liquidity release.

The essence of the current dilemma is the tug-of-war between long-term holders and the macro. LTH's cashout is like a supply-side reform, injecting new vitality into the market by clearing high cost chips. The currency and geopolitical conflicts of the Federal Reserve are external variables to whether this reform can be successfully completed.

Historical experience shows that the darkest moments of the market often breed opportunities for reversal. If LTH surrender resonates with improved liquidity, BTC may usher in a new round of outbreaks in the second half of 2025 - but this requires people to find a balance between patience and risk tolerance.