The Bitcoin market shows resilience amid structural changes.

Cryptoquant analysts have observed that the challenges currently faced by the market are similar to those in 2021, but the structural composition is different. Unlike previous cycles where panic led to increased reserves on trading platforms and intensified selling pressure, the current Bitcoin balance on exchanges is at its lowest level in a decade, indicating limited supply available for sale and a tightening market structure. The decrease in Bitcoin held by exchanges suggests that a sustained downward trend is unlikely to occur. The behavior of long-term holders differs from previous periods. In 2020 and 2021, the long-term holder spent output profit ratio (LTH-SOPR) remained below 1 for several consecutive months, indicating that investors worried about exiting the market might incur losses. However, during the recent downturn, this ratio has remained close to neutral, reflecting cautious profit-taking rather than fear-driven selling. Long-term investors continue to hold amidst fluctuations, enhancing market resilience. Looking back at past shocks, the crash in March 2020 cleared leverage, leading to a significant increase in holdings by large investors and a V-shaped rebound. In May 2021, pressured by TSL and regulatory actions, Bitcoin fell by 30%, with large investors selling approximately 50,000 Bitcoins, followed by a repurchase of 34,000 at the bottom. In August 2023, the downgrade of the U.S. debt rating triggered a 15% pullback, with SOPR briefly falling before quickly rebounding. Both events cleared excessive leverage, opening up a new accumulation phase. The current market downturn appears more mature, with forex reserves decreasing and long-term holders stable. Temporary fluctuations do not equate to structural weakness, as Bitcoin is laying the groundwork for the next rise.