作者：Jakub Dziadkowiec, BeinCrypto
Compiled by: Felix, PANews
According to the latest data, 85% of the time has passed since the May 2020 halving. At the same time, the supply held by long-term holders (LTH) is close to the all-time high (ATH). In previous cycles, this was a signal near the macro bottom, followed by the early stages of a new cycle.
LTH holdings near peak levels
Historically, Bitcoin held by long-term holders has been an indicator of the health of the crypto market. Historically, the metric has been negatively correlated with Bitcoin’s long-term price action.
Long-term holders hold onto their assets (HODL) when the market hits bottom. Moreover, the increase in long-term holders’ holdings occurs during bear markets (red arrows). This is when large investors see the price of Bitcoin plummet and are reluctant to sell. They hold onto their coins because they believe that the crypto market will rebound in the future and their investment will be profitable.
In contrast, during bull market crashes, the opposite happens. The surge in Bitcoin prices leads to long-term holders becoming increasingly willing to sell their assets to cash in. Historically, in each bull market, the Bitcoin holdings of long-term holders have declined during this period. Of course, these coins are then transferred to short-term holders (STH), who join the market later out of a desire to make a quick profit.
Cryptocurrency analyst @therationalroot posted a chart of the amount of Bitcoin in the hands of long-term holders on the X platform. He also superimposed each halving of Bitcoin on his plot (pictured above). In his chart, the first thing to notice is the fact that the proportion of Bitcoin in the hands of long-term holders is currently close to its ATH of 76%. The ATH record was set at the end of 2015, when the price of Bitcoin ended the accumulation phase before the second halving.
Then you can see that each time the indicator reaches a peak in a given cycle a few months before the Bitcoin halving (green circle). Then, after this local peak, the Bitcoin in the hands of long-term holders gradually declines and consolidates until a few months after the next halving. The sharp decline in the indicator occurs about 6 months after the halving, and the cryptocurrency enters a full bull market.
85% of the time has passed since the last halving
The aforementioned analyst also published another chart showing the progression of Bitcoin’s halving percentages (below). The chart compares the time periods between the historical halvings of the previous 3 cycles.
According to @therationalroot, the Bitcoin halving is now 85% complete. In the remaining 15%, the price of Bitcoin is basically sideways. Because analogous to the two bull markets in 2016 and 2020, the price of Bitcoin is also basically sideways.
The difference is that before these two cycles, Bitcoin experienced a sideways trend with an upward tendency. On the other hand, in the last cycle, the black swan caused by COVID-19 gave investors an additional opportunity. They could buy the bottom before the planned halving.
If history repeats itself, the crypto market could face a sideways trend for about a year in the long run. The Bitcoin halving, scheduled for mid-April 2024, may not affect the price of Bitcoin immediately. Its impact may not be felt until the last quarter of 2024 and throughout 2025.
This prediction is consistent with the trend seen on the long-term holders’ positions chart. The indicator is currently approaching its ATH. It will take about a year to reverse the trend. When long-term holders start selling after the Bitcoin halving, it will be one of the first signals of the start of the cryptocurrency bull run.
