On-chain data shows that bitcoin could currently be following a similar pattern to a previous cycle in terms of this indicator.
bitcoin Could Now Be Entering Phase 2 of the Bull Run
In a quick shot from CryptoQuant mailOne analyst noted how the recent trend in the supply of long-term bitcoin holders is reminiscent of what was seen in the 2017 cycle.
Long-term holders (LTH) make up one of the two main divisions of the btc user base made based on holding time, with the other part being known as short-term holders (STH).
The limit between these two cohorts is 155 days, where investors who bought within this window are part of the STH, while those who have more than that fall into the LTH.
Statistically, the longer an investor holds their coins, the less likely they are to sell them at any time. LTHs are therefore considered to include the most determined market participants.
Below is a chart showing the trend in the combined supply amount of the participants of the respective bitcoin pools.
<img src="https://technicalterrence.com/wp-content/uploads/2024/11/Bitcoin-Could-Be-Ready-for-39Phase-239-of-This-Historic.png" alt="Long-Term bitcoin Holder Supply” />
As can be seen from the chart, bitcoin LTH supply saw a sharp decline during the rally in the first quarter of the year, suggesting that even these diamond hands could not resist the temptation of taking profits.
Along with this decrease in LTH supply, STH supply naturally increased, as every time LTHs transfer their tokens on the blockchain, they become part of the STH cohort.
Recently, LTH supply had reversed this decline from the beginning of the year, but with the latest rally to the new all-time high (ATH), the metric has changed direction again.
In the graph, the quant has highlighted how a similar pattern was also observed 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.
The latest change in LTH supply is likely to be the start of Phase 2 distribution for the current cycle, where new capital flows in to take coins away from HODLers.
LTH supply is not the only metric showing a similar trend to the previous cycle. As the chart shared by the analyst shows, bitcoin's binary CDD is also forming an interesting pattern.
<img src="https://technicalterrence.com/wp-content/uploads/2024/11/1731183513_753_Bitcoin-Could-Be-Ready-for-39Phase-239-of-This-Historic.png" alt="bitcoin Binary CDD” />
Binary Coin Days Destroyed (CDD) basically tells us if HODLers are selling less or more than the historical average. From the chart, it is evident that the 152-day moving average (MA) of this metric may be showing a second breakout similar to the one that led to the 2021 bull run.
btc Price
bitcoin remains in ATH exploration mode as its price is trading around $75,900.
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