Summary: LTHs transferred 32,000 BTC to exchanges over two days. Excluding government transfers, potential selling pressure stands at 14,800 BTC; the key is whether the market can absorb it.
From October 7 to 8, long-term Bitcoin holders (LTHs) transferred a total of around 32,000 BTC to exchanges. On-chain analyst Murphy noted that this was the second-largest single-day transfer volume since the sharp market drop on February 5 this year.
But of the 32,000 BTC, 17,200 may not represent selling pressure.
Of the 32,000 BTC, 17,200 may not represent selling pressure
During the same period, wallets linked to the U.S. government transferred around 17,200 BTC to Coinbase Prime. Coinbase Prime provides official custody and trading services for the U.S. Marshals Service, so these transfers do not necessarily indicate a sale. Excluding this amount, the potential selling pressure worth watching is around 14,800 BTC, mainly from long-term holdings aged 6–12 months and 3–5 years.
This distinction matters. When the market sees that “long-term holders transferred 32,000 coins to exchanges,” the first reaction is often that veteran holders are selling. But the transfer of assets in government wallets to custodians is not the same as actively selling them. Conflating the two overstates the scale of the selling pressure.
The amount to watch is the 14,800 coins. It’s not insignificant, but it’s not large enough on its own to change the trend.
Average coin age of 712 days: older holders are on the move
Murphy also shared a detail: the long-term holder coins spent on October 8 had an average coin age of 712 days, up from 651 days on July 14.
Rising coin age indicates that older holdings are gradually entering circulation. Coins bought between late 2023 and early 2024 have now been held for more than two years, placing them in the long-term holder category. These coins generally have a low cost basis, so taking partial profits during a rebound or a period of volatility is normal portfolio management.
Long-term holders transferring coins to exchanges doesn’t mean they’ve hit the sell button. Distribution during the transition between bull and bear markets is a handover from veteran holders to newer ones—not the final whistle.
Distribution isn’t necessarily bearish, but it needs buyers
Murphy’s view is that long-term holder distribution during the transition between bull and bear markets isn’t necessarily bearish. A release of selling pressure at this stage can help redistribute coins. The key is whether market demand can absorb the supply effectively.
If new capital can absorb this supply, the resulting turnover could actually ease resistance for the market’s next move. Older holders exit and new holders enter, resetting the market’s average cost basis. Once this process is complete, overhead selling pressure will ease and prices will face less resistance on the way up.
But if demand is insufficient, the potential selling pressure from 14,800 coins could weigh on prices in the short term. On-chain data can tell traders that supply is increasing, but not whether demand will keep pace. Buying strength needs to be cross-checked against exchange net inflows, changes in stablecoin market capitalization, ETF flows, and other indicators.
Watch these three signals
Whether exchange net inflows persist: If exchange balances keep rising after LTH transfers, it suggests selling pressure has yet to be absorbed; if balances quickly decline after the transfers, it suggests buyers are stepping in
Stablecoin market capitalization and ETF flows: Whether new capital is entering the market will determine whether the selling pressure from 14,800 coins is absorbed or amplified
Changes in the distribution of coin age: The movements of coins held for 6 to 12 months are especially important. These holders have a higher cost basis and may be more inclined to take profits
Last time—and this time
Around the sharp drop on February 5 this year, long-term holders also transferred a similar number of coins. The market was likewise concerned that older holders would sell off, but subsequent price action showed that some of the selling pressure was absorbed by new capital. Once the coins had changed hands, prices found a new direction. The difference this time is that market sentiment and positioning are both subdued, making it harder to judge in advance how strong demand will be.
The real variable isn’t the 32,000 coins transferred to exchanges—it’s who is buying them.