Bitcoin Could Be Ready For ‘Phase 2’ Of This Historical Bull Pattern
09 November 2024 - 10:30AM
NEWSBTC
On-chain data shows Bitcoin could currently be following a similar
pattern as in a previous cycle in terms of this indicator. Bitcoin
Could Now Be Entering Phase 2 Of The Bull Run In a CryptoQuant
Quicktake post, an analyst has pointed out how the recent trend in
the Bitcoin long-term holder supply has been reminiscent to what
was observed in the 2017 cycle. The long-term holders (LTHs) make
up for one of the two main divisions of the BTC userbase done on
the basis of holding time, with the other side being known as the
short-term holders (STHs). The cutoff between these two cohorts is
155 days, with investors who bought inside this window being part
of the STHs, while those holding since more than it falling in the
LTHs. Related Reading: Bitcoin Sentiment Enters Danger Zone:
Investors Now Extremely Greedy Statistically, the longer an
investor holds onto their coins, the less likely they become to
sell said coins at any point. Thus, the LTHs are considered to
include the more resolute market participants. Below is a chart
that shows the trend in the combined amount of supply held by the
participants of the respective Bitcoin groups. As is visible in the
graph, the Bitcoin LTH supply observed a sharp decline back during
the rally of the first quarter of the year, suggesting that even
these diamond hands couldn’t resist the temptation of
profit-taking. Alongside this decrease in the LTH supply, the STH
supply naturally went up, as whenever the LTHs transfer their
tokens on the blockchain, they become part of the STH cohort
instead. Recently, the LTH supply had reversed this drawdown from
earlier in the year, but with the latest rally to the new all-time
high (ATH), the metric has again switched directions. In the chart,
the quant has highlighted how a similar pattern was also witnessed
back during the 2017 cycle; a first phase of distribution from the
LTHs was followed by accumulation, which then led to a second phase
of distribution. Related Reading: Dogecoin Descending Triangle
Could Hint At Next Destination For DOGE It’s possible that the
latest turnaround in the LTH supply is the start of the phase 2
distribution for the current cycle, where fresh capital flows in to
take coins off the hands of the HODLers. The LTH supply isn’t the
only metric that’s showing a trend that matches that of the
previous cycle. As the chart shared by the analyst shows, the
Bitcoin Binary CDD is also forming an interesting pattern. The
Binary Coin Days Destroyed (CDD) basically tells us about whether
the HODLers are selling less or more than the historical average.
From the graph, it’s apparent that the 152-day moving average (MA)
of this metric may be showing a second breakout similar to the one
that led into the 2021 bull run. BTC Price Bitcoin continues to be
in ATH exploration mode as its price is trading around $75,900.
Featured image from Dall-E, CryptoQuant.com, chart from
TradingView.com
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