Bitcoin Could Be Ready For ‘Phase 2’ Of This Historical Bull Pattern

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As a seasoned researcher with years of experience in the crypto market, I find it intriguing to observe the similarities between the current Bitcoin trend and that of the 2017 cycle. The recent shift in the long-term holder (LTH) supply seems to echo the pattern we saw during the first quarter rally, suggesting that we might be entering phase 2 of the bull run.

According to on-chain analysis, Bitcoin‘s current behavior seems to mirror a pattern observed during a prior cycle with regard to this specific indicator.

Bitcoin Could Now Be Entering Phase 2 Of The Bull Run

A recent analysis in a CryptoQuant post suggests that the current pattern seen in long-term Bitcoin holders mirrors the behavior noted during the 2017 market cycle.

Among Bitcoin users, there are two primary categories typically divided based on holding duration. These groups are referred to as Long-Term Investors (LTIs) and Short-Term Traders (STTs), where LTIs are those who hold their Bitcoins for a longer period, while STTs tend to trade more frequently.

The dividing line for these two groups is set at 155 days. Investors who purchased within that timeframe are classified as Short-Term Holders (STHs), whereas those who have held their investments for longer than that fall under Long-Term Holders (LTHs).

From a statistical standpoint, it’s often found that investors who hold onto their investments for longer periods tend to be less inclined to sell them. Consequently, Long-Term Holders (LTHs) are typically seen as those with a more determined approach in the marketplace.

Here’s a graph displaying the progression of the collective Bitcoins supply owned by each group’s participants over time.

It’s clear from the graph that the long-term Bitcoin holdings experienced a significant drop during the first-quarter surge. This suggests that even those with strong hands found it hard to resist the urge to cash in on their profits.

In tandem with the reduction in Long-Term Holder (LTH) supply, it’s only natural that the Short-Term Holder (STH) supply increases. This happens because when LTHs move their tokens on the blockchain, they shift from being Long-Term Holders to Short-Term Holders instead.

More recently, the LTH supply trend had been moving opposite from its initial decline earlier in the year. However, with the recent surge reaching a new peak (all-time high), this metric appears to have changed direction once more.

The expert in the graph has pointed out that a similar trend occurred during the 2017 period as well. Initially, there was a distribution phase originating from the long-term holders, followed by a gathering or accumulation phase. This accumulation stage eventually led to another distribution phase.

It’s plausible that the recent shift in LTH supply could be initiating the second phase of distribution within this cycle. This phase typically involves new funds pouring in, aiming to acquire coins from long-term holders (HODLers).

Another important factor, aside from the LTH supply, is exhibiting a similar pattern as the previous cycle based on the chart provided by the analyst. This factor is the Bitcoin Binary DCD, which appears to be shaping up quite intriguingly.

The Binary Coin Days Destroyed (CDD) indicator gives us insight into whether coin holders are selling more or less than usual compared to historical data. From the chart, it seems like the 152-day moving average (MA) of this metric might be indicating a second surge, much like the one preceding the 2021 bull market.

BTC Price

Bitcoin continues to be in ATH exploration mode as its price is trading around $75,900.

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2024-11-09 12:40