Bitcoin (BTC) has dropped by 7.6% since nearly touching the key $100,000 level on November 22, marking the largest correction since the rally that followed Donald Trump’s election win, which had seen Bitcoin surge from $66,000 to new record highs. Despite this pullback, such drops are not uncommon in bull markets, where Bitcoin typically experiences corrections of 20% to 30% as excess leverage is cleared out.

The main reason Bitcoin failed to breach $100,000 was the surge in profit-taking. On November 21, Bitcoin saw a record $10.5 billion in profit realized, according to Glassnode data. This marked the largest profit-taking day in Bitcoin’s history. The driving force behind this profit-taking is the long-term holders (LTH), a group of investors who hold their Bitcoin for more than 155 days. These holders are often considered the “smart money” in the market, as they tend to buy during market downturns and sell during periods of heightened market optimism.

Between September and November 2024, long-term holders have sold 549,119 BTC, representing 3.85% of their total holdings. Their selling has outpaced purchases from institutional buyers like MicroStrategy and U.S.-based Bitcoin ETFs.

Historically, Bitcoin’s price corrections have become smaller with each cycle. In 2017, the price dropped by 25.3%, in 2021 it fell 13.4%, and earlier this year it was a 6.51% correction. Currently, the correction stands at 3.85%. If this pattern continues, it would suggest a further 1.19% drop, or roughly 163,031 BTC, bringing the long-term holders’ supply to around 13.54 million BTC.

This ongoing trend of diminishing corrections, coupled with higher lows in long-term holders’ supply, suggests that although selling pressure may persist, Bitcoin’s market structure is likely to remain strong, supporting continued growth in the long term.