Bitcoin long-term holders (LTHs) have once again become the focus of analysts as the cryptocurrency experiences a 4.5% correction from its all-time high (ATH) above $100,000, reached last Thursday. These holders, who retain their Bitcoin for over 155 days, play a crucial role in shaping market movements through their strategic accumulation and distribution behaviors.
Key Trends and Historical Context
Insights from CryptoQuant analyst Datascope underscore the significance of the LTH accumulation/distribution ratio as a vital on-chain metric. This ratio reveals whether LTHs are actively accumulating Bitcoin, suggestive of market bottoms, or liquidating their holdings during price peaks, which often precede market corrections.
Historical data from 2013 and 2017 indicates that LTHs engaged in significant selling during market highs, aligning with notable price corrections. These corrections, driven by profit-taking, marked the end of bullish cycles. Conversely, during the market lows of 2019 and 2020, LTHs demonstrated strong accumulation tendencies, signaling their confidence in Bitcoin’s long-term potential and setting the stage for subsequent price rallies.
In 2024, Datascope’s analysis reveals that the LTH metric continues to provide critical insights into current market conditions. Recent data points to increased selling activity among LTHs, a behavior typical during periods of market overheating or resistance at prevailing price levels. While this trend may suggest an impending correction, it also raises the possibility of a new accumulation phase. Supporting this notion, a recent CryptoQuant report indicates sustained buying pressure from U.S. investors.
Current Outlook on Bitcoin
Despite Bitcoin’s recent price drop following the $103,679 ATH recorded yesterday, the cryptocurrency remains on an upward trend. As of now, BTC has declined by 2.2% over the past 24 hours, trading at $99,208. However, over the past month, Bitcoin has appreciated by approximately 33.6%, with a current market capitalization of $1.965 trillion.
Datascope comments on Bitcoin’s current market outlook, noting that the market is at a crossroads, potentially entering a new upward cycle or consolidating before a deeper correction. With Bitcoin in an “overheated” zone, investors should exercise caution and consider profit-taking opportunities.
