Cryptoquant: Long-term investors are cautiously taking profits, and temporary fluctuations do not equate to structural weaknesses.

BlockBeats news, on October 17, analysts from Cryptoquant stated that the market is facing shocks similar to those of 2021, but currently has a different structure. In the previous cycle, the panic phase saw an increase in platform reserves, and liquidity influx into platforms amplified selling pressure. Now, the Bitcoin balance on platforms is at the lowest level in a decade, indicating limited supply available for sale, making the market structure more tense. The amount of Bitcoin held by platforms has decreased, and a sustained downtrend is unlikely to form. The behavior of long-term holders is also different from before. In 2020 and 2021, the long-term holder SOPR (LTH-SOPR) was months below 1, indicating that investors were fearful of escaping losses. However, during this decline, that ratio has remained around neutral, showing cautious profit-taking rather than fear-driven selling. Long-term investors continue to hold through fluctuations, enhancing market resilience. Looking back at past shocks, the collapse in March 2020 cleared leverage, and large investors accumulated significantly, leading to a V-shaped rebound. In May 2021, influenced by TSL and regulatory pressure, Bitcoin fell by 30%, and large investors sold about 50,000 Bitcoins, later repurchasing 34,000 at the bottom. In August 2023, the downgrade of the US debt rating triggered a 15% pullback, with SOPR briefly declining, then quickly rebounding. Each event cleared excessive leverage and entered a new round of accumulation. This decline appears more mature. With the decrease in platform reserves and stability among long-term holders, temporary fluctuations do not equate to structural weakness, as Bitcoin is laying the foundation for the next rising cycle.