Mid-Cycle Wallets Drive Bitcoin Selloff, VanEck Says

The recent Bitcoin selloff is being driven by mid-cycle wallets, while long-term holders have remained remarkably steady, according VanEck.

The fund management giant said in a Nov. 19 report that selling by these mid-cycle wallets, which bought BTC during the early-to-mid stages of the cycle, is behind Bitcoin plummeting over 20% in the past month, and more than 31% since its all-time high of $126K on Oct. 6.

Bitcoin continued its slump in the past 24 hours, slumping more than 6% to trade at $86,129.36 as of 1:35 a.m. EST

BTC price (Source: CoinMarketCap) 

Long-Term Bitcoin Conviction Remains Intact

VanEck said that wallets with coins last moved in the past five years account for the majority of the recent selling activity, adding that the oldest holders have remained “remarkably steady” even as investor sentiment remains negative. 

It added that coins that were moved over five years ago have added approximately 278K BTC over the past two years, showing long-term investor conviction remains intact. 

According to the report, the 3-5 year age band has fallen 32% over the past two years as mid-cycle investors’ coins changed hands, but VanEck believes that this trend is due to turnover among cycle traders rather than capitulation by decade-long holders. 

The asset management firm also pointed to a reset in speculative positioning. It said open interest in Bitcoin perpetuals has dropped 20% in BTC terms and around 32% in USD terms since Oct. 9. This has pushed funding rates to levels similar to past washed-out periods, the firm said. 

VanEck concluded that the combination of long-term investor stability, cohort rotations and futures-market capitulation leaves Bitcoin in a “reset” state that has historically been followed by tactical rebounds. 

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