On-chain data reveals that while Bitcoin diamond hands' selling has reached new highs, it is fundamentally different from the bull runs of 2017 and 2021. Long-term holders are behaving more rationally, and the current situation will not simply replicate past bubble trends.
What is a Bitcoin diamond hand?
“Diamond hand” refers to holders who are not afraid of price fluctuations and persist in holding their assets, and is one of the hot keywords in the crypto market. On-chain analysis utilizes unused BTC reserves (such as UTXO old coins) to measure the behavior of long-term holders, providing an important perspective for understanding the movements of large holders.
What trends do on-chain data show?
Recent studies show that in 2024 and 2025, the number of Bitcoin long-term unspent coins re-entering the market significantly increases, reaching a historical high. This trend is cumulatively reflected in the behavior patterns of long-term holders. Notably, this selling occurs against a backdrop of relatively stable overall market fluctuations and is not accompanied by extreme speculative sentiment.
Analysis indicates that long-term holders began to gradually reduce their positions since $40,000, rather than at the traditional bull run peak.
Market characteristics of the bull run in 2017 and 2021
In 2017, the price of Bitcoin skyrocketed several times throughout the year, reaching nearly $20,000 at one point, during which market speculation was extremely high. Retail investors’ FOMO and news reports drove the price up rapidly, while volatility was intense.
The bull run in 2021 also showed strong upward momentum, with prices breaking through from several tens of thousands to a high of about 68,000 USD. However, the subsequent sharp decline indicated a significant accumulation of market risk.
On the contrary, the current price range is fluctuating. Although there are long-term holders selling, there has not been a similar extreme bubble-like growth followed by a rapid collapse.
What are the differences between the current dumping and the historical ones?
From multiple dimensions, the current dumping behavior is significantly different from historical bull runs:
- The selling started at a lower price point: long-term holders began to sell around the price of 40,000 dollars, instead of waiting for extreme highs.
- Lack of extreme FOMO: There is no retail frenzy to chase prices up like in the past.
- Market volatility is low: recent prices have been fluctuating within a range, rather than experiencing explosive increases or sharp declines.
These differences indicate that the current market is undergoing a structural change, rather than simply replicating the previous bull run critical dynamics.
Analysis of Structural Changes in the Market
As the maturity of the cryptocurrency market increases and institutional funds gradually enter, investors are paying more attention to risk and asset allocation. This change has led long-term holders to no longer adhere to the strategy of “waiting for all-time highs,” but rather to prefer to lock in profits at certain stages. This reflects a shift in the mindset of market participants from speculation-driven to rational asset management.
Insights and Strategic Recommendations for Investors
For ordinary investors, it is crucial to understand the differences between on-chain signals and historical patterns. Although diamond hands dumping is worth paying attention to, it is not equivalent to a bubble burst signal. It is recommended that investors:
- Make a comprehensive judgment by combining more on-chain indicators (such as exchange balances, capital inflows, etc.)
- Avoid relying solely on historical cycles to predict future trends.
- Emphasize risk management and reasonable position control
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
