作者：Jakub Dziadkowiec, BeinCrypto
Compiled by: Felix, PANews
According to the latest data, 85% of the time from the May 2020 halving to the next round of halving has passed. Meanwhile, supply held by long-term holders (LTH) is near all-time highs (ATH). In previous cycles this was a signal near a macro bottom, followed by the early stages of a new cycle.
LTH holdings approach peak levels
Historically, Bitcoin holdings by long-term holders have been an indicator of the health of the cryptocurrency market. Historically, this metric has been negatively correlated with Bitcoin’s long-term price action.
Long-term position holders hold assets in place (HODL) when the market bottoms. Moreover, increases in long-term holders' positions occur during bear markets (red arrow). This is when large investors see the price of Bitcoin plummet and are reluctant to sell. They hold onto their tokens in the belief that the crypto market will rebound in the future and their investment will be profitable.
In contrast, during a bull market crash, the opposite is true. The surge in Bitcoin prices has led to an increasing willingness among long-term holders to sell their assets to take advantage of the situation. Historically, in every bull market, long-term holders’ Bitcoin holdings have declined during the period. Of course, these tokens are then transferred to short-term holders (STH), who join the market at a later stage out of a desire to make quick profits.
Cryptocurrency analyst The Rational Root published a chart on the X platform of the number of Bitcoins in the hands of long-term holders. He also overlays each Bitcoin halving on his plot (above). In his chart, the first thing to notice is the fact that the proportion of Bitcoin in circulation in the hands of long-term holders is currently close to around 76% of its ATH. The ATH record was set in late 2015 when Bitcoin price ended its accumulation phase ahead of the second halving.
It can then be seen that each time this indicator reaches its peak for a given cycle a few months before the Bitcoin halving occurs (green circle). Then, after this local peak, Bitcoin in the hands of long-term holders gradually declined and traded sideways until a few months after the next halving. The sharp drop in this indicator comes about 6 months after the halving, before the cryptocurrency entered a full bull market.
Since the last round of halving, 85% of the time has passed
The above-mentioned analyst also posted another chart showing the progress of Bitcoin’s halving percentage (below). This graph compares the time period between historical halvings for the previous 3 cycles.
According to The Rational Root, the Bitcoin halving is currently 85% complete. For the remaining 15% of the time, Bitcoin’s price essentially moved sideways. Because analogy to the two bull markets in 2016 and 2020, the price of Bitcoin has basically shown a sideways trend.
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 the new crown epidemic gave investors additional opportunities. They can buy the dip ahead of the planned halving.
If history repeats itself, the crypto market could face a sideways trend for about a year in the long term. The Bitcoin halving, scheduled for mid-April 2024, may not have an immediate impact on Bitcoin’s price. The impact may not be felt until the last quarter of 2024 and throughout 2025.
This prediction is consistent with the trends seen on the long-term holder position chart. The indicator is currently approaching 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 that a cryptocurrency bull run has begun.
(The above content is excerpted and reprinted with the authorization of our partner PANews, original text link)
Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.
This article analyzes the Bitcoin halving period: Will the bull market start as early as 2024? First appeared in Block Guest.
