Bitcoin Enters Late Bull Cycle Stage, Says Analyst: What Investors Need to Know Now

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The behavior of the digital currency sector, chiefly driven by Bitcoin, typically mirrors a series of rising and falling trends that are influenced by investor attitudes and underlying market conditions.

From January 2023 onwards, during the ongoing bull market phase for Bitcoin, it’s experienced significant increases not only in its value but also in market longevity. The influx of fresh investments by newcomers has fueled this growth, while existing investors have chosen to reinvest their earnings.

As a crypto investor, I’ve been noticing some signs that our current market cycle might be nearing its end, leaving me curious about what the future holds for Bitcoin and the entire cryptocurrency sphere.

Key Indicators Point to Cautious Optimism

One key piece of data backing up this finding is the proportion of Bitcoin transactions from the last month in relation to its total realized market capitalization, represented by UTXO (Unspent Transaction Output). As per the latest report by well-known CryptoQuant analyst “Crypto Dan,” this figure currently stands at 36%.

Dan’s analysis indicates that, although this figure hasn’t yet reached the high points of past bull markets, its declining trend implies that the market may be moving towards its cycle top.

It’s likely that this peak will happen during the first or second quarter of 2025, but instead of one massive spike, the pattern might show multiple sharp rises, up to an additional 2-4 times, before it ends based on past trends.

This usual trend often indicates that the market is becoming too hot, which can lead to a later downturn or a ‘bear’ phase. Dan emphasized that even though the market still offers opportunities for growth, it would be prudent to adopt a cautious strategy when it comes to risk control.

Previously, during the later phases of a bull market, there tends to be higher price fluctuations because more investors start taking profits, thereby affecting market trends. (Dan)

Even though some might consider a more aggressive approach, given prudence and careful consideration of potential risks, it’s best to proceed slowly by selling my investments over time.

An important finding from analyzing blockchain data pertains to the interaction between short-term investors and long-term holders. In the past, periods of heightened short-term trading are frequently followed by market downturns or corrections.

Investors that bought stocks when prices were climbing might start offloading their shares, potentially causing a brief dip in prices. On the other hand, investors who are in it for the long haul tend to stay strong during these times, acting as a balancing factor within the market.

Bitcoin Sees Recovery As The New Year Begins

In the final month of 2024, Bitcoin had been battling and staying under $100,000. However, as we move into 2025’s first month, it seems that Bitcoin has once again picked up its bullish pace.

Initially, Bitcoin started the new year priced below $95,000, but within a short span, it resumed its surge and regained the $100,000 mark, now trading at approximately $101,624.

Currently, when this is being written, Bitcoin has experienced a 3.9% rise over the past day, moving its value nearer to the new record high of around $108,000 it reached last month.

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2025-01-07 12:04