Bitcoin’s Market at a Crossroads: Are Long-Term Holders Signalling a Correction or a Rally?
The role of long-term Bitcoin holders (LTH) is once again under analyst scrutiny as the asset currently faces a 4.5% pullback from its all-time high (ATH) Over $100,000 Created on Thursday.
These holders are defined as those who have held Bitcoin for more than 155 days and are known to significantly influence market movements through their accumulation and distribution actions.
the latest one analyze CryptoQuant analyst Datascope highlighted key trends in LTH activity that could signal the next phase for Bitcoin.
Key Trends and Historical Background
Datascope insights highlight importance of LTH accumulation/distribution Ratios serve as on-chain metrics. This ratio reflects whether LTH is accumulating Bitcoin (signaling a market bottom), or liquidating Bitcoin holdings during price peaks (usually signaling a price correction).
Looking at historical patterns from 2013 and 2017, LTH saw heavy selling at market highs, while periods like 2019 and 2020 saw strong accumulations, paving the way for a bull run.
According to datascope’s analysis, the 2013 and 2017 peaks were characterized by intensified selling activity in LTH and were associated with significant price corrections.
These profit-taking-driven corrections mark the peak of a bullish cycle. Conversely, LTH showed strong performance during the lows of 2019 and 2020 accumulation tendencywhich showed confidence in Bitcoin’s long-term potential and set the stage for subsequent price surges.
Now in 2024, datascope notes that the LTH indicator is once again providing important insights into market conditions. Recent data shows an increase in selling activity in LTH, which is behavior observed during periods of market overheating or when current price levels encounter resistance.
Although this trend may suggest Will be corrected soonwhich also increases the possibility of the market transitioning to a new accumulation stage. Echoing this, a recent report from CryptoQuant showed continued buying pressure from U.S. investors.
Bitcoin tops $100,000 as institutional demand drives market.
The Coinbase Premium Index highlights continued buying pressure from U.S. investors. pic.twitter.com/eZvKFCmVxs
— CryptoQuant.com (@cryptoquant_com) December 5, 2024
Current Bitcoin Outlook
Bitcoin price continues to fall after hitting an all-time record of $103,679 yesterday. As of this writing, BTC is down 2.2% in the past 24 hours and is currently Transaction price is $99,208.
Still, the asset appears to be on an upward trend. Over the past month, Bitcoin has still risen by about 33.6%, and its current market value is US$1.965 trillion.
Commenting on Bitcoin’s current market outlook, datascope wrote:
The market is at a crossroads and may enter a new upcycle or consolidate before further corrections. With Bitcoin in “overheated” territory, investors should exercise caution and evaluate profit-taking opportunities.
Featured image created using DALL-E, chart from TradingView
