Bitcoin Could Be Ready For ‘Phase 2’ Of This Historical Bull Pattern
2024-11-09

On-chain data shows Bitcoin could currently be following a similar pattern as in a previous cycle in terms of this indicator.
Bitcoin Could Now Be Entering Phase 2 Of The Bull Run
In a CryptoQuant Quicktake post, an analyst has pointed out how the recent trend in the Bitcoin long-term holder supply has been reminiscent to what was observed in the 2017 cycle.
The long-term holders (LTHs) make up for one of the two main divisions of the BTC userbase done on the basis of holding time, with the other side being known as the short-term holders (STHs).
The cutoff between these two cohorts is 155 days, with investors who bought inside this window being part of the STHs, while those holding since more than it falling in the LTHs.
Statistically, the longer an investor holds onto their coins, the less likely they become to sell said coins at any point. Thus, the LTHs are considered to include the more resolute market participants.
Below is a chart that shows the trend in the combined amount of supply held by the participants of the respective Bitcoin groups.
As is visible in the graph, the Bitcoin LTH supply observed a sharp decline back during the rally of the first quarter of the year, suggesting that even these diamond hands couldn’t resist the temptation of profit-taking.
Alongside this decrease in the LTH supply, the STH supply naturally went up, as whenever the LTHs transfer their tokens on the blockchain, they become part of the STH cohort instead.
Recently, the LTH supply had reversed this drawdown from earlier in the year, but with the latest rally to the new all-time high (ATH), the metric has again switched directions.
In the chart, the quant has highlighted how a similar pattern was also witnessed back during the 2017 cycle; a first phase of distribution from the LTHs was followed by accumulation, which then led to a second phase of distribution.
It’s possible that the latest turnaround in the LTH supply is the start of the phase 2 distribution for the current cycle, where fresh capital flows in to take coins off the hands of the HODLers.
The LTH supply isn’t the only metric that’s showing a trend that matches that of the previous cycle. As the chart shared by the analyst shows, the Bitcoin Binary CDD is also forming an interesting pattern.
The Binary Coin Days Destroyed (CDD) basically tells us about whether the HODLers are selling less or more than the historical average. From the graph, it’s apparent that the 152-day moving average (MA) of this metric may be showing a second breakout similar to the one that led into the 2021 bull run.
BTC Price
Bitcoin continues to be in ATH exploration mode as its price is trading around $75,900.