Bitcoin
Bitcoin Bull Cycle – How Long Should You HODL Before BTC Hits Its Peak?
- Low UTXO age ranges and dominant short liquidations suggest price could move higher
- Veterans also accumulated again
Bitcoin [BTC] has not reached the top of this cycle, according to Realized Cap signals. For context, Realized Cap tracks the value of each UTXO based on the price it last moved at, compared to the coin’s current value .
UTXO stands for Unspent Transaction Output and represents the amount of Bitcoin remaining after a transaction. AMBCrypto’s analysis of CryptoQuant data revealed that UTXO age bands, to date, were not close to the zenith reached during the 2021 bull market.
This metric measures active individual purchases in the market. When this metric is extremely high, it means a lot of money is flowing into Bitcoin. It also indicates that the end of the bull cycle may be near.
Source: CryptoQuant
Is another 80% increase possible?
However, that was not the case as the percentage remains much lower than its previous peak. Due to this data, it can be assumed that the price of BTC will surpass the high of $73,750 in March.
Crypto Dan, analyst and author at CryptoQuant, also shared a similar view. According to him, Bitcoin only reached 20% of this bullish cycle. He noticed,
“The current short-term cash inflow situation is significantly lower than the peak of the last bull cycle.”
However, this was not the only sign that BTC could rise further this cycle. Checkmate, a pseudonymous network analyst, also weighed in on the matter.
However, this time, the analyst focused on what is happening in the derivatives market. Based on the data that the analyst shared, the year 2021 peak was hurt by an increase in long settlements. In his newsletter he said:
“Last time, this was actually a sign that the market had peaked.”
For the uninitiated, liquidations occur when a trader’s position is closed due to an insufficient margin balance to keep it open. This also happens if a trader uses high leverage and the target hits the stop loss.
Source: Coinglass
HODLing is the way to go
Long liquidations mean that the majority of positions eliminated are those betting on a price increase. However, this year, most liquidations were short, reinforcing Bitcoin’s position potential to reach a new all-time high.
Additionally, AMBCrypto analyzed Coin Days Destroyed (CDD). This metric shows whether HODLers are actively spending their coins or hoarding more.
A high CDD indicates an increase in coins spent and can lead to a drop in price. Based on our analysis, we found that a spike in the metric occurred on March 24, after which the price of Bitcoin fell.
Source: Glassnode
Is your portfolio green? Check the Bitcoin Profit Calculator
At the time of writing this article, the CDD had returned to the baseline held in 2020, before the explosive run of 2021. As HODLing continues to be investors’ preferred option, Bitcoin could still produce a monster rally before this cycle reaches its peak.