Bitcoin long-term holders halt selling as fear index hits 20

Bitcoin fell below a key support level as the Fear & Greed Index dropped to 20 on June 24, entering extreme fear, while on-chain data showed long-term holders paused selling.

"The pause in long-term holder distribution suggests the market may be approaching a phase where selling pressure from experienced holders has largely exhausted," a Glassnode analyst said, citing wallet behavior data through June 24.

The Fear & Greed Index declined one point from the prior day to 20, its lowest level in recent months, according to CoinMarketCap data. Long-term holders — wallets holding bitcoin for at least 155 days — shifted from net distribution to accumulation over the past week, on-chain data shows. Derivatives data indicated elevated put-to-call ratios, suggesting traders are hedging against further downside. Bitcoin's 24-hour trading volume remained above the seven-day average as the sell-off accelerated during the Asian trading session.

The combination of extreme fear and reduced long-term holder selling has historically preceded price stabilization or trend reversals in prior market cycles. However, persistent macro headwinds, including elevated inflation and delayed Federal Reserve rate cuts, continue to pressure risk assets. The next major test for bitcoin will be whether it can hold current support levels ahead of the July Fed meeting, with a break below potentially accelerating losses toward the next demand zone.

The shift in long-term holder behavior marks a departure from the distribution trend that dominated the past two months, when wallets with significant unrealized profits gradually reduced positions. The pause removes a key source of downward supply pressure, though macro uncertainty remains a headwind.

A weekly report from a major exchange's Ventures division noted that market risk appetite remains under pressure, with investors advised to focus on conviction rather than short-term price fluctuations. Ether tracked bitcoin lower, while selling pressure spread across major tokens including solana and XRP.

A dovish pivot from the Federal Reserve at its July meeting could trigger a recovery in risk appetite across crypto markets, according to the report. Until then, the extreme fear reading suggests the market remains vulnerable to further downside, though the long-term holder accumulation signal offers a counterpoint for patient investors.

This article is for informational purposes only and does not constitute investment advice.