I went through BTC’s historical data and found an interesting pattern—the price tends to hover in a high range every time long-term holders capitulate on a large scale.

The routines in previous cycles were pretty clear: old holders sell at a loss and exit, and the amount of BTC on exchanges spikes. What does this mean? The real long-term holders are cashing out at the top and leaving. This signal has never failed in the past—whenever these people start selling in large numbers, Bitcoin’s local top is usually near.

But this cycle isn’t following the script at all. Even though on-chain data shows a decrease in coins held by long-term holders, the weird thing is that exchange balances are also dropping at the same time. That doesn’t add up—if it’s not the old players selling, then who’s actually offloading their coins?

A more reasonable explanation is: long-term holders aren’t moving at all; instead, exchanges are being forced to dip into their own reserves to maintain liquidity because there’s not enough selling pressure in the market. So on paper, it looks like long-term holders are retreating, but in reality, it might be the exchanges “bleeding out.”

Based on historical experience, when this kind of data appears, BTC should be rising, but now it’s falling. That leaves only two possibilities:

Either this data model that’s worked for over a decade has completely failed;
Or, we’re in a special phase like what happened in 2021.

Looking back at 2021, after the March 12 crash, there was a similar red alert area, and then the market dragged on until July before it really rebounded. If this time is following the same script, then we might be in the darkest hour just before dawn.