On-chain data reveals influence of Bitcoin holders on market cycles

Bitcoin holders and market cycles are often correlated, so understanding this interplay is critical for both investors and traders. On-chain data shows that the supply of Bitcoin held by investors for 18 months to 2 years typically increases when BTC prices form a bottom, and then spikes after bottoming out.

Currently, the data suggests that the Bitcoin price has hit lows, with short-term holders (less than 6 months) holding higher and higher as the price rises. These short-term holders accumulate coins after the lowest price point and continue as the price increases, causing the MVRV rate to increase.

Bitcoin 1

Source: CryptoQuant

But it’s worth noting that the market top will coincide with short-term holdings exceeding 6 million BTC, compared to 4.7 million currently. Therefore, it remains to be seen how much more the price of Bitcoin will rise, and whether short-term holders will continue to accumulate at the current pace.

On the other hand, the holdings of long-term Bitcoin holders who have not moved Bitcoin for 1 year or more (1 year supply idle) hit an all-time high at the end of March, and the trend of holding 13 million Bitcoin currently continues. The 1-year idle supply typically increases for most of a bull market and only starts to decrease towards the end of the bull market.

The interplay between Bitcoin holders and market cycles is an important factor in determining futures prices. Current data shows that the market cycle is on an upward trajectory, with short-term holders accumulating tokens as prices rise. However, the future remains uncertain, and investors and traders should pay close attention to the interplay between Bitcoin holders and market cycles to make informed decisions.


according to Kyptos

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