Bitcoin price analysis sees ‘strong rally’ as old coins become dormant
Analysis of Bitcoin's onchain data suggests a new bull market is beginning, as long-term holders reduce their selling activity, a pattern historically preceding strong rallies.
Intelligence analysis by Gemini 2.5 Flash
Onchain analytics firm CryptoQuant indicates that the declining share of Bitcoin's realized cap held by coins dormant for 18 months or longer signals the early stages of a bullish cycle. This trend, coupled with reduced spending from long-term investors, points to a potential sustained uptrend for BTC.
Imagine Bitcoin is like a special treasure chest. When people who've kept their treasures for a very long time start to just hold onto them even more, instead of taking them out, it's a secret sign that the treasure might become much more valuable soon. It's like they know something good is coming, so they're waiting for the best time to open their chests.
Analysis
Onchain metrics are increasingly vital for understanding Bitcoin's market cycles, offering a transparent view into investor behavior that traditional market analysis often misses. The current data, particularly from CryptoQuant, highlights a significant shift in the activity of long-term Bitcoin holders, which has historically been a precursor to major price movements. This analytical approach focuses on the 'realized cap' and 'UTXO age bands' to discern underlying market sentiment and potential future trends, moving beyond mere price action to examine the fundamental supply dynamics.
CryptoQuant Analysis
CryptoQuant's methodology centers on observing the proportion of Bitcoin's realized cap held by different age cohorts. Their recent findings indicate a notable decline in the share held by coins that have remained unmoved for 18 months or longer, dropping from 26.98% to 26.59% since mid-September. This reduction in long-term holder activity is interpreted as a bullish signal, aligning with historical patterns where similar declines preceded strong Bitcoin rallies.
The firm emphasizes that this trend reversal, while modest, suggests the market is entering a new bullish cycle. They note that previous bull markets were consistently accompanied by longer reductions in this cohort's onchain activity. This implies that the current market conditions are merely the 'early stages' of what could be a prolonged period of positive price action, fostering a positive outlook on both the potential upside and the duration of the rally.
18-Month-Plus Cohort
The behavior of the 18-month-plus cohort is central to the current bullish thesis. These investors, who have held their Bitcoin for extended periods, are now exhibiting reduced onchain spending. This behavior reflects a strategic decision to maintain their BTC exposure, aiming to maximize profitability over the long term rather than realizing short-term gains or losses.
The realized cap, which values coins at the price they last moved, provides a clearer picture of the aggregate cost basis for these long-term holders. The slight decrease in their share suggests that while some profit-taking occurred as Bitcoin fell from its all-time high of $126,200, the overall trend is towards accumulation or dormancy. Notably, only the 18-month-to-two-year cohort currently faces a net loss with a cost basis of $93,193, while older cohorts remain in aggregate profit, indicating resilience among the most seasoned holders.
Galaxy Digital's Perspective
Adding another layer to the bullish narrative, crypto investment company Galaxy Digital characterizes the current market as experiencing the 'shallowest' bear market on record, with a maximum drawdown of only -53% from all-time highs. This contrasts sharply with previous cycles, where drawdowns were often more severe and prolonged. Their analysis reinforces the idea of a more resilient market structure.
Galaxy Digital also highlights the activity of coins dormant for five years or more. While these older coins contributed significantly to supply distribution in 2024 and 2025, with over 1.11 million BTC moved, their monthly onchain volume has now halved to an average of 34,000 BTC in 2026. This reduced selling pressure from the oldest coins, following a period where much of their supply was absorbed by spot ETFs and digital asset treasury companies, further supports the case for a fresh long-term uptrend in Bitcoin's price.
Key points
- Bitcoin's onchain data indicates the early stages of a new bull market.
- Long-term holders (18 months or longer) are reducing their onchain activity, a historical precursor to rallies.
- The share of realized cap held by these dormant coins has slightly declined from 26.98% to 26.59% since mid-September.
- Galaxy Digital notes this is the 'shallowest' bear market on record, with a maximum drawdown of -53%.
- Five-year-plus dormant coins show significantly reduced monthly onchain volume in 2026 compared to previous years, easing selling pressure.
The analysis strongly suggests Bitcoin is entering the early stages of a new bull market, implying significant potential for price appreciation and sustained growth. Reduced selling pressure from long-term holders could foster increased investor confidence and attract new capital, leading to a robust and prolonged rally.
Despite the positive signals, the 'modest' nature of the UTXO trend reversal indicates the rally is in its nascent phase and could be vulnerable to external economic shocks or a failure to attract sufficient new demand. The fact that the 18-month-to-two-year cohort is still in net loss could present a selling barrier if prices do not ascend quickly enough.
Market signals
- BTC Onchain analysis indicates a new bull market is beginning due to reduced selling pressure from long-term holders, historically preceding strong rallies.
AI-generated analysis of potential market relevance. Not financial advice.
