The role of Bitcoin long-term holders (LTHs) is once again under analysts’ microscope as the asset is currently facing a 4.5% correction from its all-time high (ATH) above $100,000 established on Thursday.
These holders, defined as those who hold their Bitcoin for more than 155 days, are known to influence market movements through their accumulation and distribution behaviors significantly.
Modern analysis Written by CryptoQuant Analyst Datascope has highlighted key trends in LTH activity that could indicate the next phase for Bitcoin.
Major trends and historical context
Datascope insights highlight the importance of the LTH accumulation/distribution ratio as an on-chain metric. This ratio reflects whether LTHs are accumulating Bitcoin, indicating market bottoms, or liquidating holdings during price peaks, often indicating corrections.
Historical patterns from 2013 and 2017 saw LTHs engage in significant sell-offs at market highs, while periods like 2019 and 2020 were characterized by intense accumulation, paving the way for bull markets.
According to Datascope’s analysis, the peaks of 2013 and 2017, which were characterized by increased selling activity from LTHs, were associated with significant price corrections.
These corrections, fueled by profit-taking, marked the culmination of bull cycles. Conversely, during the 2019 and 2020 lows, LTHs showed strong accretion trends, signaling confidence in Bitcoin’s long-term potential and laying the foundation for subsequent price rallies.
Now in 2024, datascope noted that the LTH metric is once again providing important insights into market conditions. Recent data reveals increased selling activity among LTHs, a behavior observed during periods of market heat or resistance at current price levels.
While this trend can signal an impending correction, it also increases the likelihood that the market will move into a new accumulation phase. Confirming this, a recent report from CryptoQuant revealed continued buying pressure from US investors.
Bitcoin crosses $100K as institutional demand drives market.
The Coinbase Premium Index highlights continued buying pressure from US investors. pic.twitter.com/eZvKFCmVxs
— CryptoQuant.com (@cryptoquant_com) December 5, 2024
Current forecasts on Bitcoin
Bitcoin continued to see a decline in its price after recording $103,679 ATH yesterday. At the time of writing, Bitcoin is down 2.2% over the past 24 hours at a current trading price of $99,208.
Regardless, it appears that the asset is still in an uptrend. Over the past month, Bitcoin is still up approximately 33.6% with a current market cap of $1.965 trillion.
Commenting on the current Bitcoin market outlook, Datascope wrote:
The market is at a crossroads, and will likely enter a new bull cycle or consolidate before a deeper correction. With Bitcoin in an “overheated” zone, investors should be cautious and evaluate profit-making opportunities.
Featured image created with DALL-E, chart from TradingView
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