Bitcoin has shown weakness in recent weeks as long-term holders have returned the coin to the market, raising concerns about the sustainability of the recent uptrend.
According to data from Glassnode, around 62,000 BTC worth $7 billion has been transferred from the wallets of long-term holders since mid-October.
This is the first significant decrease in illiquidity supply in the second half of 2025 and could directly impact Bitcoin price momentum.
The rare digital asset, which reached an all-time high of over $125,000 in early October, is currently trading around $115,000.
Illiquid Bitcoins are coins that are stored in wallets with little or no sales history. These are coins that are considered “off the market.” Movement in such a coin often means that previously inactive investors are starting to sell or transfer their assets.
Glassnode added that this is the biggest decline in recent months, with Bitcoin’s illiquid supply falling to approximately 14.303 million BTC as of late October.
This increase in available or liquid supply means that it is difficult for the price of Bitcoin to rise unless there is significant buying demand. Historically, a reduction in illiquidity supply preceded a phase in which price growth slowed as more coins became available for sale.
One of the main reasons for this liquidity shift appears to be selling by mid-market investors. According to data from Glassnode, wallets holding between 0.1 and 100 BTC (approximately $10,000 to $7 million worth of Bitcoin) have been consistently sold for almost a year.
These mid-sized sellers added a large amount of supply to the market, creating a weaker bullish structure.
Analysts say momentum traders and first-time buyers are also pulling back, creating a gap in demand. “The momentum buyers have largely exited, but the push-pull buyers haven’t been able to come in with enough demand to absorb that supply.” Glassnode pointed out.
As a result, Bitcoin’s price recovery has been limited. Market analysts expect the stock to remain in the range of $108,000 to $115,000 as selling pressure outweighs buying interest.
While small investors are selling, whales (wallets with large amounts of Bitcoin) have accumulated during this period. According to on-chain data, Whale Wallet added approximately 16,300 BTC in the past 30 days.
“In fact, the whale wallet is accumulating at this stage.” Glassnode tweeted. “Since October 15th, they have sold very few positions.”
So even if short-term holders are cautious, large investors still think Bitcoin has long-term value. However, the accumulation is not large enough to offset the increased supply from mid-sized distributors.
Meanwhile, Binance’s Bitcoin reserves have fallen to around 613,000 BTC, the lowest level since July, according to CryptoQuant data. This typically means the investor is moving the coins into a private wallet and is a sign of long-term confidence in the asset.
However, market sentiment remains fragile as dormant coins become active again and more Bitcoins enter circulation. Analysts say the combination of illiquid supply and limited demand has historically led to stagnation and slow price corrections.
Beyond on-chain metrics, broader market conditions are also influencing Bitcoin’s price.
Traders are keeping an eye on the US Federal Reserve, speculating that it may ease monetary policy after a period of tightening. Risk assets, including Bitcoin, will benefit once liquidity returns to the system.