A crypto analyst says Bitcoin is in a state of “musical chairs” right now and warns that traders should be “prepared when the music stops.”

Bitcoin’s climb toward $100,000 has seen a significant amount of offloads from long-term holders, which some analysts say signals a potential top that could turn markets bearish and catch traders offside when buy-side demand starts to wane.

“It’s a game of musical chairs: enjoy the ride, but be prepared when the music stops,” CryptoQuant contributor Maartuun said in a Dec. 8 X post.

Long-term hodlers are offloading their Bitcoin

Since Nov. 8, long-term holders — wallets who have held Bitcoin  for at least 155 days — have sold 827,783 BTC worth around $82.59 billion at its current price of around $99,200.

Maartuun highlighted the around 149,800 BTC purchased from Michael Saylor’s MicroStrategy and the 84,193 BTC worth of inflows into spot Bitcoin exchange-traded funds (ETFs) over the same period.

Still, he said that these are the equivalent of just 30% of what’s being sold by long-term holders.

“The overall market is much larger than just them,” he said.

Maartuun suggested that Bitcoin is maintaining its strength despite the strong sell pressure from long-term holders due to retail demand also reaching its “yearly highs,” according to CryptoQuant’s retail demand 30-day change chart.

“Retail is also involved in futures trading,” he said. CoinGlass shows Bitcoin Open Interest (OI) — a metric tracking the total number of unsettled Bitcoin derivative contracts such as options and futures — is $61.18 billion at the time of publication.

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Long-term Bitcoin holders sitting on significant unrealized profits

Maartuun also claimed that the sell-side risk ratio and the net taker volume indicate “a top.”

According to Bitbo data, the Long Term Holder realized price — the average price paid by long-term Bitcoin holders — is $24,481, representing approximately a 400% average gain for long-term holders.

At the time of publication, Bitcoin’s price is $99,203, according to CoinMarketCap.

On Dec. 6, Real Vision chief crypto analyst Jamie Coutts said liquidity conditions, as expressed by his Bitcoin MSI macro model, suggest pain may come next.

“Bitcoin has hit new ATHs in the face of a deteriorating liquidity backdrop,” he said.

Coutt believes if conditions “worsen, the rally, while euphoric, can only last for a limited time.”