Crypto analytics firm K33 Research reveals that the reactivation of dormant Bitcoin this year is putting pressure on the market. A lack of liquidity and selling by long-term holders are challenging the recovery of the leading cryptocurrency's price.
The cryptocurrency market is going through a phase of structural correction that has taken many participants in the sector by surprise after the all-time highs recorded in October.
Bitcoin, which managed to break through the psychological and technical barrier of $126.000, has experienced a decline of nearly 26%, struggling to maintain key support levels in a highly volatile environment. At the time of writing, the leading cryptocurrency is trading at around $87.000.
Although external factors such as tensions between the United States and its trading partners, uncertainty about the Federal Reserve's monetary policy, and the recent federal government shutdown put downward pressure on Bitcoin's price, the latest analyses point to a deeper, internal cause: an unprecedented reactivation of capital that had lain dormant for years.
Recent data provided by the analysis firm K33 Research indicates that, during the course of 2025 alone, nearly $300.000 billion worth of Bitcoin, which had remained dormant for long periods, has re-entered circulation.
This figure represents selling pressure that the current market is having serious difficulty absorbing. The institutional accumulation narrative that drove prices higher earlier this year has given way to a phase of aggressive distribution, where veteran investors are realizing their profits at a faster pace than expected.
Buy Bitcoin now on Bit2MeThe awakening of old wallets: dormant bitcoins awaken and are sold en masse
The K33 Research report, cited by BloombergThe report details that the number of coins held for at least two years has decreased by 1,6 million units since the beginning of 2023. This metric is crucial for understanding the current dynamics, as it indicates that long-term Bitcoin holders are not waiting for higher prices, but are taking advantage of existing liquidity to exit their positions.
Vetle Lunde, senior analyst at the firm, explains that these reactivations differ from previous cycles because they do not seek to rotate capital towards other smaller cryptocurrencies, but rather seek a direct exit through the liquidity provided by US ETFs and corporate treasury demand.
For much of the past year, this selling pressure was effectively absorbed by the voracious appetite of new exchange-traded funds and institutional acquisition strategies. However, the scenario has changed dramatically in recent weeks.
Net inflows into ETFs have turned negative and volume in the derivatives market has declined, leaving the spot market exposed and without the buffer that cushioned the massive sell-off. CryptoQuant supports this view, reporting that the last 30 days have seen one of the heaviest distributions by long-term investors in over five years.
The impact of October's leverage purge on the crypto market
The market's fragility became evident on October 10, a date that marked a turning point in short-term trader confidence. Unexpected comments and threats of punitive tariffs from US President Donald Trump against China triggered a wave of selling that resulted in liquidations worth more than $19.000 billion.
This event, as reported by Bit2Me News, was recorded as the largest single-day leverage cleanup in cryptocurrency history, triggering a massive withdrawal of traders from the derivatives market.
Since that drop, open interest in Bitcoin perpetual options and futures has remained well below previous levels, according to Coinglass data.
The absence of these operators has reduced market depth and exacerbated price movements in response to any significant sell order. Even popular arbitrage strategies, such as basis trading, which seeks to profit from discrepancies between spot and futures prices, have ceased to be profitable for large funds, eliminating another vital source of liquidity for the market.
Trade BTC directly on Bit2MeThe end of the sale of ancient coins is near.
However, despite this bleak short-term outlook, K33 Research's analysis also offers an important nuance regarding the immediate future. In this regard, Lunde suggests that the selling by long-term Bitcoin holders may be nearing its end.
On the Bitcoin blockchain, the movement of coins that have been dormant for years follows a predictable pattern. These massive reactivations of old supplies, which occur when their owners decide to sell, have a finite cycle because the available stock decreases with each transaction.
Meanwhile, this process redistributes ownership to newer and more diverse hands, preventing wealth from remaining concentrated in the hands of a few. Bitcoin's price fluctuates along the way, dropping due to the extra supply pressure, but eventually stabilizes as fresh demand from incoming investors absorbs those coins and restores the balance. Thus, the price of BTC is expected to stabilize once this cycle is complete.
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