The Relationship Between Bitcoin HODLer Balance and Market Cycles
According to market intelligence platform IntoTheBlock, the supply of Bitcoin long-term holders (LTHs) can be used as an indicator for measuring market cycles. LTHs are investors who have held onto their coins for at least a year without selling or transferring them on the blockchain.
LTHs are known as the resolute hands in the market, rarely selling their coins even during profitable opportunities or price crashes. One way to track their behavior is by monitoring the combined balance of their wallets.
HODLer Accumulation During Bull Runs
Historical data shows that during previous bull runs, LTHs have accumulated more Bitcoin. Conversely, when they start selling, it often coincides with the beginning of a bull rally. Currently, LTHs are still accumulating, suggesting that the market may be in the pre-bull run phase.
If this pattern holds true for the current cycle, a significant downtrend in HODLer supply could signal the start of a new bull run.
Bitcoin Price Recovery
Yesterday, Bitcoin experienced a dip towards $41,700 but has since recovered and is now trading around $43,000.
Hot Take: The Significance of HODLer Supply
The supply of Bitcoin long-term holders can provide valuable insights into market cycles. By tracking their accumulation or selling behavior, investors can potentially identify key points in bull runs. As LTHs continue to accumulate, it suggests that the market may still be in the pre-bull run phase. However, if there is a significant downtrend in HODLer supply, it could indicate that a new bull run has begun. Monitoring this metric can help crypto enthusiasts make informed investment decisions.
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