Analysts expect the bull market to continue even as long-term hodlers start to take profits.
According to the recent report by analyst Dylan LeClair, long-term hodlers have started to sell some of their bitcoin. This moment marks the beginning of the distribution phase, a natural period in Bitcoin’s price cycle during which new investors enter the market while hodlers begin to sell some of the funds they have accumulated in the previous phase.
The following chart from Glassnode provides a visual representation of the newly started distribution phase and the distribution phases that occurred in previous cycles.
According to LeClair and other analysts, the selling of bitcoin by long-term hodlers is expected to increase with the arrival of new all-time highs. However, the growing institutional demand should be able to absorb the supply, thus favoring an extension of the bullish trend.
The role of ETFs
Despite the onset of sales, analysts foresee a continuation of the bull market due to the strong demand for bitcoin from spot ETFs.
The report highlights how companies managing the ETFs are representing a significant portion of the current market demand. ETFs are breaking all kinds of records in terms of capital inflows and trading volumes.
On March 5th, BlackRock‘s ETF (IBIT) recorded an inflow of $788 million. Since its launch, only BlackRock and Fidelity have purchased more than 284,000 BTC.
