Bitcoin has faced three consecutive quarters of losses, a pattern not seen since the 2022 bear market, with its price declining about 20% each quarter on average. This extended slump has pushed over half of its circulating supply underwater, bringing the behavior of long-term holders into sharp focus.
These long-term holders (LTHs), defined as investors holding Bitcoin for more than five months, currently control approximately 78% of the circulating supply. This group largely weathered both the surge to Bitcoin’s all-time high near $126,000 and the subsequent retreat to around $60,000. The fact that they have not capitulated—and have in fact increased their holdings—signals strong conviction amid the downturn, with LTH supply hitting a record high as recently as June.
Historically, Bitcoin’s market lows have coincided with long-term holder capitulation, but the present cycle is unfolding differently. While LTHs remain resilient, they closely watch macroeconomic indicators, especially Federal Reserve policies, which continue to shape market sentiment.
In the near term, expectations around U.S. interest rates have shifted. Currently, the market assigns a large probability that the Fed will hold rates steady in the coming July meeting, but tighter conditions are increasingly anticipated toward autumn. By the September meeting, there is nearly an equal chance of a rate hike or a pause, with some speculation about a larger increase still on the table. This shift dampens hopes for imminent rate cuts and suggests a more cautious environment for risk assets like Bitcoin.
Looking back at prior Bitcoin bear markets, both in 2018 and 2022, the price only found a bottom after enduring nine straight monthly declines. The current cycle has seen seven such months so far, hinting that further downside pressure may still lie ahead. If past trends repeat, ongoing selling from long-term holders could trigger Bitcoin’s final capitulation, potentially bringing the price down toward the $50,000 range by late Q3 before stabilizing.