66.5% of Bitcoin LTH supply in profit, but the bull market signal is still missing – Here’s why!

The longer the market compresses below resistance, the more supply dynamics take control of the setup. 

Notably, Bitcoin’s [BTC] current market setup seems to be reinforcing this playbook. On the technical side, BTC’s 13.7% rally so far in Q2 has pushed sentiment back into risk-on mood, with risk appetite gradually returning. However, from an on-chain perspective, it’s still too early to confidently label this as a bull market. 

As shown in the chart below, the total Bitcoin supply held by long-term holders (coins held for more than 155 days) has hit 66.5%. Still, analysts point out that this remains relatively low compared to historical ranges. The reasoning is straightforward – Many holders accumulated these coins at higher prices, so as they transition into LTH status, a large portion remains underwater.

From a technical standpoint, Bitcoin continues to trade roughly 15% below its December open near $90K.

In this context, BTC’s consolidation creates an interesting setup. The longer the price stays range-bound, the more supply from the Q4 cohort shifts into LTH hands while still sitting in unrealized losses. If market flips risk-off, the risk of capitulation naturally rises as underwater holders may start cutting exposure. 

Against this backdrop, analysts believe that Bitcoin remains far from a confirmed bull market. However, if the price decisively breaks resistance and pushes more long-term holders back into historically bullish ranges, could this consolidation actually be setting the stage for the next expansion phase?

Bitcoin sees leverage flushed and FOMO persist 

The past 48 hours have been a reminder of what Bitcoin volatility really looks like.

From a technical standpoint, Bitcoin closed above $79K on 22 April, printing a second consecutive weekly higher high after facing rejection near $78K the week before. The subsequent dip towards $77K, however, sparked market panic, with many analysts expecting another rejection at resistance.

And yet, the sentiment evolved differently. According to Santiment, market mood flipped rapidly, moving from extreme pessimism earlier in the week to aggressive FOMO. In fact, just as Bitcoin appeared ready to break down following the $80K, buyers stepped in and pushed the price back above $78.7K. With the $80K-level now back within reach, rising FOMO suggests traders are once again positioning for continuation.

Unsurprisingly, many market participants viewed the pullback as a healthy reset.

In this context, with leverage flushed and sentiment turning risk-on again, a breakout above $80K might be increasingly plausible. However, zooming out to long-term holder behavior tells a more measured story. Historically, strong bull-market phases tend to emerge only when LTH-held Bitcoin supply moves above roughly 85% – Evidence that the current cycle may still be in a transitional phase rather than a full expansion. 

Until supply reaches that threshold, the price risks pushing newer cohorts deeper into unrealized losses. That makes LTH positioning a key signal to watch when judging whether the market is truly building toward a sustained bull run, something that remains off the table unless BTC clears the overhead resistance decisively. 

Final Summary

• Prolonged consolidation below resistance continues to push LTHs into unrealized losses.
• With over-leveraged positions flushed and sentiment turning risk-on again, a breakout could trigger expansion.