BitcoinThe Bitcoin price is trading at $66,365 as of 3:00 am EST, down 1% over the last 24 hours.

BTC has dropped as much as 10% over the last two days, reaching a low of $64,521 on April 2.

As the big crypto struggles to recover on Wednesday, dormant BTC are re-entering the market as Long-Term Holders (LTHs) enter the distribution phase, selling to new investors at higher prices.

According to the latest report by Glassnode, "the divergence between Long and Short-Term Holder supply has started closing," signaling the reawakening of dormant supply. 

The report published on April 2 noted that LTH supply declined by 900,000 BTC since it reached a peak of 14.91 million BTC in December 2023, with GBTC trust accounting for more than 33%, or 286,000 BTC.

On the other hand, the Short-Term Holder Supply (STHS) has increased by more than 1.12 million BTC, "absorbing the LTH distribution pressure, as well as acquiring an additional 121k BTC from the secondary market via exchanges," Glassnode said.

"As prices rise, and unrealized profits held by investors increase, it entices Long-Term Holders (LTHs) to part with their holdings."

Long/Short-term holder threshold. Source: Glassnode

Additional data from IntoTheBlock highlights the current selling, suggesting that it might be due to profit-taking. According to its In/Out of the Money Around Price (IOMAP) model, more than 94% of Bitcoin investors are "in the money" – in profit, at the current price.

Bitcoin IOMAP chart. Source: IntoTheBlock

This indicates that LTHs are cashing in on their holdings at higher prices as BTC rotates into the hands of STHs.

Glassnode said,

"Profit-taking continues to dominate investor behavior, with both the Long and Short-Term Holder cohorts taking chips off the table."

BTC price needs to hold above $65,000 to secure the uptrend

Bitcoin price fell over 6% on Tuesday, reaching a daily low of $64,521 before recovering to produce a daily candlestick close above $65,000.

This is a crucial level for the big crypto, as a close below would spell doom for BTC longs. According to the IOMAP chart above, this level is within the $51,989 and $65,593 price range, where 1.9 million BTC are currently being held by roughly 3.97 million addresses.

This cohort of investors is robust enough to absorb any selling pressure threatening to pull the price lower.

The RSI was pointing upwards, a suggestion that these buyers were returning to the market. They will now try to push BTC back above $68,000 and eventually to the $70,000 psychological level.

A daily candlestick close above the upper limit of the range at $71,314 would confirm a bullish breakout for the pioneer cryptocurrency. The next logical move is the March 14 all-time high at $73,835 and later into price discovery toward $80,000.

TradingView Chart: BTC/USD

On the downside, a decisive close below $65,00 would signal the continuation of the downtrend, with the first line of defense arising from the 50-day exponential moving average (EMA) at $62,936. Additional lines of support are found at the $60,000 psychological level at the 100-day EMa at $56,000.