Financial Insights That Matter
The price of Bitcoin (BTC) declined by 3.38% in the past week forcing the premier cryptocurrency to remain in consolidation following a major price correction in December. This recent struggling price performance continues to cast doubt over BTC’s future with several analysts speculating on the current status of a highly hyped crypto bull run.
Bitcoin LTH Distribution Slows Down – Could The Bull Market Be Over?
In a recent post on X, blockchain analysis firm Glassnode provided some insights on Bitcoin long-term holders (LTH) activity with possible implications on the asset’s price. Amidst the price rally in Q4 2024, Bitcoin LTH embarked on a selling spree with the majority of this offload being absorbed by short-term holders and new investors, who have been showcasing a heightened demand in this period.
According to Glassnode, data on the LTH supply indicates this sell-off is still on but currently at a slower rate indicating that distribution has reached its peak.
Generally, a peak in LTH distribution indicates a potential shift in market dynamics, suggesting a change to BTC’s present bullish structure. However, historical data has also shown price gains to still occur despite LTH distribution reaching a peak. This finding indicates that a local top in LTH distribution may not always equate to a certain macro price peak.
Therefore, the recent reduction in LTH selling activity does not confirm the bull run is over as price momentum can still persist due to factors including increased demand from other market participants as seen with the STHs or heightened institutional interest.
Interestingly, historical data has also proven the bull market cycle to end only when LTHs are holding BTC at a loss for an extended period. However, Glassnode highlights that the Bitcoin LTH supply in loss is at 0% i.e. no long-term holders are currently at a loss as they acquired BTC at far lower prices from today’s market.
Therefore, the Bitcoin bullish market still appears fundamentally strong, which reduces all likelihood of an imminent cycle top.
BTC New Entrants Control ~50% Network Liquidity
In other developments, the percentage of Bitcoin wealth of new market participants has grown significantly in recent weeks as long-term holders gainfully distributed their assets. According to data from Glassnode, these new BTC investors now own 49.6% of the network liquidity suggesting they control almost half of Bitcoin being actively traded, thereby reshaping ownership patterns.
At the time of writing, Bitcoin continues to trade at $94,191 following a 0.88% gain in the past day. However, the asset’s daily trading volume has decreased by 3.89% and is now valued at $58.46 billion.
Featured image from The Edge Malaysia, chart from Tradingview
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