CryptoQuant: Bitcoin Diamond Hands Sell-Off Hits New High, But History of Crashes Will Not Repeat

CryptoQuant research shows that Bitcoin diamond hands will sell off record amounts in 2024-2025, but the pattern differs from 2017/2021. The current supply rebound is occurring in a low-volatility environment, with long-term holders starting to sell from $40,000. This is not just a price cycle, but a fundamental shift in holder structure.

Bitcoin diamond hands sell-off hits record highs

(Source: CryptoQuant)

The latest research from on-chain analysis platform CryptoQuant confirms that during this bull market, “long-standing cryptocurrencies” continue to sell. Since 2024, unspent transaction outputs (UTXOs) involving BTC that have not been spent for two years or more have surged. “Notably, the annual re-supply provided by Bitcoin diamond hands in 2024 and 2025 has reached a new all-time high in Bitcoin history,” commented Kripto Mevsimi alongside an explanatory chart.

Data indicates that the distribution in 2024 and 2025 will resemble that at the end of the previous bull run in 2017, when BTC/USD broke above $20,000. However, the key difference lies in the nature of the sell-off and market environment. The 2017 sell-off occurred amid frantic price surges and peak retail FOMO, with long-term holders choosing to take profits during market euphoria. The pattern in 2021 was similar, with large amounts of old coins flooding the market as Bitcoin soared from $10,000 to $69,000.

“This is not just a replay of 2017 or 2021,” emphasized Kripto Mevsimi. “While previous cycles saw supply rebounds accompanied by strong price momentum and speculative capital inflows, the current recovery is happening in a relatively subdued market environment, and the coins involved are noticeably older.”

This difference is extremely significant. In the previous two bull markets, Bitcoin diamond hands’ sell-offs often marked the cycle top, coinciding with market euphoria and skyrocketing prices. But this round’s sell-off is unfolding in a relatively stable market environment, without the frantic speculation seen in 2017 or 2021. It suggests that the motivation for long-term holders to sell has changed, no longer following a “sell at the peak” strategy, but rather a more rational asset allocation adjustment.

Key differences between 2024-2025 and historical cycles

Price volatility: Currently lower, no signs of the frantic surge of 2017/2021

Speculative sentiment: Lack of retail FOMO and media frenzy coverage

Coin age: Involving older coins, possibly early holders from 2011-2013

Sell-off pace: Starting from $40,000, not waiting until cycle top

Strategic selling starting at $40,000

(Source: CryptoQuant)

CryptoQuant believes that Bitcoin diamond hands are now “reassessing” their market exposure, and this has been ongoing since the price broke above $40,000. This finding is highly insightful. $40,000 is not a key technical resistance level nor a historical high, but long-term holders are choosing to systematically sell at this price.

This behavior may reflect several factors. First, many long-term holders who bought in 2020-2021 have already realized substantial profits at $40,000. For those who bought between $10,000 and $20,000, $40,000 represents a 2x to 4x return, enough to trigger profit-taking. Second, after experiencing the bear market of 2022 and the slow recovery in 2023, these holders may have become more cautious, no longer believing in a frenzy like the one that drove Bitcoin to $69,000 in 2021.

Earlier Bitcoin diamond hands (bought in 2011-2015) have different considerations. For holders who bought between $100 and $1,000, even selling at $40,000 has realized tens or hundreds of times returns. After holding for over a decade, these early believers may be considering wealth realization and diversification. After all, even the most steadfast believers might choose to cash out part of their holdings after achieving life-changing wealth to reduce risk.

Kripto Mevsimi commented on this latest phase of the trend: “Data from early 2026 does not yet show a complete reversal of this trend, but compared to the peaks of 2024-2025, the long-term supply rebound has already eased.” “Over time, whether this represents a temporary softening or the start of a new accumulation phase will become clearer.”

Holder structure transformation is more important than price cycles

As Cointelegraph reported, long-term holders pushing long-idle cryptocurrencies into the market has become a major topic in recent months. Starting from Q4 2025, Bitcoin’s performance relative to other major asset classes has been poor, which in turn has raised questions about whether next year’s price cycle might differ from previous ones.

It is worth noting that 2026 is expected to be a bear market year, with various forecasts predicting prices will fall well below the current level of $90,000. Whether the four-year cycle remains valid is also a topic of debate among market participants. Traditionally, Bitcoin follows a four-year halving cycle: after halving, it enters a bull market, peaks, then enters a bear market, and bottoms out before the next halving. The fourth halving occurred in April 2024, and according to historical patterns, 2025 should be the peak year of the bull market.

However, the current market performance challenges this pattern. Although Bitcoin hit new highs in 2024, it did not experience the parabolic surge seen in 2017 or 2021. Prices oscillate between $90,000 and $100,000, lacking clear breakout momentum. This trend diverges from the traditional four-year cycle expectations, raising doubts about the cycle theory’s validity.

CryptoQuant summarized: “Bitcoin is not only experiencing price cycles, but the reasons for holder behavior and their motivations may also be changing — and the supply behavior of Bitcoin diamond hands is one of the clearest on-chain signals of this shift.” This judgment is very profound. It suggests that the Bitcoin market is undergoing structural changes, shifting from early speculative-driven to more mature institutional allocation-driven dynamics.

Signs of changing holder structure

Shift in selling strategy: from “waiting for the cycle top” to “phased profit-taking”

Lower risk appetite: becoming more cautious after bear markets, no longer betting on extreme moves

Institutional trend: ETFs and pension products are changing the composition of market participants

Cycle weakening: the predictive power of the traditional four-year halving cycle may be diminishing

This transformation offers new challenges to the analysis of why Bitcoin is rising today. Traditionally, analysts have predicted price highs and lows based on the four-year cycle. But if the cycle pattern is breaking down and the holder structure is fundamentally changing, the old analytical frameworks may need to be re-evaluated. Future Bitcoin prices might be more influenced by institutional demand, regulatory environments, and macroeconomic factors rather than the mechanical halving cycle.