Waiting like Zhang Sanfeng — the distance to the Bitcoin bear bottom is shrinking

Master Zhang Sanfeng, the martial arts grandmaster in Jin Yong’s novels, once taught Zhang Wuji a profound truth: the true pinnacle of martial arts is not in fierce attacks, but in the wisdom of soft overcoming hard. The current Bitcoin market is unfolding a similar story. The bears, like the “Mystic Shadow Palm,” with their extreme yin and cold assaults, seem formidable, but the bulls are employing Zhang Sanfeng’s tactics—fighting while retreating, layering defenses, and not rushing to counterattack against the trend. The outcome of this battle largely depends on time. According to on-chain data, the bear market bottom is not far away.

The Real Power of the Bear ‘Mystic Shadow Palm’—Distribution Storm of 5,095,000 BTC

Since mid-2025, long-term holders (LTH) have launched a massive sell-off. Data shows they have distributed a total of 5.095 million BTC, accounting for 25% of the circulating supply. This huge number once seemed unbelievable—why would LTH accelerate selling during a prolonged downturn and widespread pessimism?

The answer is simple: urgent profit realization. Long-term holders hold large unrealized gains, making them the dominant force among the bears. It’s like the attack of the “Mystic Shadow Palm”—seemingly fierce, but with an underlying logic—they must convert virtual gains into real ones at some point. The distribution by LTH is the most direct expression of this real-world need.

However, the key point is that although LTH distributed 5.095 million BTC, their net reduction was only 417,000 BTC, meaning over 4.78 million BTC were absorbed and held by new market participants. This hidden phenomenon behind the number warrants deep reflection.

New Entrants—Traditional Capital and Hidden Big Players Join the Fray

Who is absorbing the LTH’s sell-off? The answer involves a completely different participant structure from previous cycles—including traditional giants like BlackRock and MicroStrategy (MSTR), as well as many unknown hidden whales.

The emergence of these new buyers (STH) signifies a profound change in the Bitcoin market ecosystem. In past cycles, main participants were relatively fixed. Now, with ETF launches, the entry of Data Analytics firms, and even national strategic reserves, the power dynamics have shifted. While LTHs are selling, these new players are quietly accumulating, re-emerging as long-term holders.

This is the brilliance of Zhang Sanfeng’s strategy—not a direct counterattack on the bears, but gradually exhausting their strength through market absorption. Demand will naturally appear at the right time, as long as the price offers sufficient value.

Bulls’ Layered Defense—From 100K to 60K ‘Taiji’ Tactics

Looking at the support levels during this downtrend, we see the bulls employing wise tactical adjustments. From the initial defense at $100,000, to the secondary at $85,000, and now at around $67,000, each time the bulls strategically retreat in the face of strong bear assaults.

This is not passive withdrawal but active tactical planning. The bulls are absorbing panic liquidity, using the “soft overcoming hard” approach to drain the bears’ momentum. They are not rushing to launch counterattacks or push against the trend but are accumulating at every attractive price point. This slow and steady strategy is a perfect market embodiment of Zhang Sanfeng’s martial wisdom.

Distribution Fatigue and the Critical Bottom—Time Is Playing Its Role

After distributing over 5 million BTC, how much do LTHs still want to cash out at the $60,000 level? It’s hard to quantify precisely. But on-chain trends show that the distribution momentum is already waning.

What does this mean? It indicates that the bear “Mystic Shadow Palm” attack is gradually losing strength. When the bears exhaust their last bit of power, it will be the best moment for the bulls to reverse the trend and turn the tide. The arrival of this moment mainly depends on one factor—time.

So, how far is the “bottom” from us? The answer is: not far. What is most needed now is patience and wisdom like Zhang Sanfeng’s—waiting for the bears’ strength to dissipate through market absorption and the passage of time. The critical point of the bear market bottom is approaching, and investors who understand this already hold the key to the entire cycle.