Bitcoin (BTC) Market Cycle May Be Shifting as LTHs Distribute Holdings to STHs

The historical data for Bitcoin illustrated a repeating pattern akin to the events of 2017, marking a pivotal phase in Bitcoin's market cycle.

The recent historical data for Bitcoin price action seems to be indicating a repeating pattern, not unlike the events of 2017, which marked a pivotal phase in Bitcoin’s market cycle.

After Phase 1, where Long-Term Holders (LTHs) were accumulating, they began distributing their holdings, transitioning into what could be the next critical phase.

This shift was evidenced by the increase in Short-Term Holder (STH) supply. This indicates a significant influx of new capital into the market.

CryptoQuant analyst predicted possible breakout as in the previous cycles, suggesting possible preparations for another significant upward trend.

The surge in the Binary CDD and the pattern of breakouts around these surges supported the hypothesis that we are moving towards a period of heightened activity and price increases.

Additionally, a chart of STH and LTH supply percentages revealed that similar supply dynamics have previously catalyzed major bull runs. The increase in STH supply and the corresponding decline in LTH supply often preluded aggressive market phases.

If this cycle follows the precedent set in 2017, Bitcoin could experience a substantial upsurge, propelled by fresh investments and growing market liquidity, entering what is anticipated as Phase 2 of its economic cycle.

Accumulation Gaining Momentum

Further analysis shows that the recent surge in inflows to Bitcoin accumulation addresses signified a substantial shift of over 57,800 BTC valued around $4.16 Billion. This marked a crucial precondition for advancing into the next market phase, termed “Phase 2.”

These inflows, highlighted by the sharp rise in the inflow graph, underscore a robust accumulation activity. Notably, this is contrary to movement observed during earlier days.

This pattern, often preceding a bullish trend, indicated that substantial capital has begun to stabilize within secure wallets. This suggests strong investor confidence and a strategic positioning for potential price appreciation.

The graph clearly delineated this with an ascending trajectory in the price line along with the inflow spikes. This affirms that significant liquidity has been redirected towards accumulation addresses.

As these addresses typically represented informed investors betting on future price increases, this movement could catalyze a new rally.

Given the alignment with past precursors to bullish phases, it is likely that this concentrated buying activity will underpin further upward price movements in Bitcoin.

This means potential replication of scenarios similar to previous cycles where large accumulations led to significant market upswings.

The Realized Cap Signals an Uptrend For Bitcoin

Over the past month, the Bitcoin Realized Cap increased by 3.8%, reaching an all-time high of $656 Billion. This indicates substantial capital inflows totaling $2.5 Billion.

This significant rise reflects a robust accumulation trend, similar to the level of activity last seen in January 2023. The increased Realized Cap suggested that Bitcoin’s market valuation, based on the price at which each coin last moved, has markedly expanded.

Such a rise often implied that holders who bought at lower prices are not yet selling, instead betting on future price increases.

This phenomenon signaled a solidification in the foundation for entering a new bullish phase —Phase 2—characterized by increased confidence and potential for higher prices.

The fresh influx of capital could catalyze further price appreciation if this trend persists. Investors have shown the willingness to purchase and hold, indicating optimism about Bitcoin’s future trajectory.

This behavior could support sustained upward momentum in the market, reinforcing bullish sentiments and potentially leading to further gains before correction starts.