Bitcoin’s on-chain data suggests market has hit the bottom


The current bear market is different from previous bear markets in several ways. One way to track differences is to compare the behavior of short-term and long-term Bitcoin (BTC) holders.

In previous bear markets, short-term holders who have held BTC for less than six months are usually speculators who are there looking for higher prices. As such, when price rises above the circulating supply, it usually indicates that the price of the cycle has reached its peak. Short-term holders usually pile up at this point for fear of missing out.

bitcoin supply
Source: Glassnode

On-chain data shows that short-term holders are now at the same point they were in the previous bear market, suggesting they have lost trust and exited the ecosystem. Judging by the cycles so far, we are already nearing the bottom of this cycle.

However, long-term holders who have held BTC for over a year now hold over 66% of the asset supply. Additionally, the cohort has not yet sold in a year despite all the events that have occurred to date. This indicates a stronger conviction among this group of investors.

Bitcoin Hodl wave
Source: Glassnode

LTH typically accumulates when prices fall, and its behavior is usually the catalyst for the next bull market. This has happened in previous bearish cycles.

Whether this will happen remains doubtful given that the current cycle is more about macroeconomic conditions, particularly Fed policy, than crypto investor behavior.

Bitcoin (BTC) has already fallen from its previous cycle peak, which occurred for the first time in a bear market. This represents the kind of precedent set by the current bear market and shows how insane it is.

More rate hikes likely, BTC price drops further as Fed says people should expect more pain and inflation shows little sign of abating There is likely to be.

Posted In: Bitcoin, Research

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