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Bitcoin’s Current Cycle Is Among the Worst Despite New ATH: Glassnode
Glassnode’s latest report suggests that while Bitcoin has hit a new all-time high this year, its current cycle is among the worst compared to previous cycles.
Today, the cryptocurrency market is experiencing a remarkable recovery, led by Bitcoin Rally as it recovers the $63K range. Altcoins followed suit, hitting new monthly highs. This development comes just two weeks after Bitcoin dropped to a low of $53K.
Amid this bullish recovery, analytics platform Glassnode conducted an in-depth analysis analyses of Bitcoin’s price movements over the past 18 months. He compared the current cycle to previous ones and observed strange similarities.
Bitcoin Replicates History, albeit with Little Uptrend
According to the report, the market has seen a steady increase in prices for 18 months following the FTX CollapseHowever, after Bitcoin hit a high of $73,750, a three-month period of price consolidation followed.
During the bearish days between May and July, the Bitcoin market experienced the most significant correction of this bull cycle, falling more than 26% from its all-time high.
Meanwhile, Glassnode noted that this decline has been relatively mild compared to previous cycles. For example, in the 2020/2021 bull season, Bitcoin fell 63% before the final rally at the peak of the cycle. In the previous season, Bitcoin also retraced 36%.
However, the analysis revealed that Bitcoin’s price action shows a striking similarity to previous cycles when measured from the lowest point of each cycle, echoing the patterns observed in 2018-2021 and 2015-2017.
However, a closer look at the data reveals a stark contrast when performance is indexed to Bitcoin’s halving date. Surprisingly, the current cycle ranks among the worst despite the market hitting a new all-time high ahead of April’s halving event, a milestone never seen before.
For illustration, three months after Bitcoin’s fifth and most recent halving, the asset is down 13%. This contrasts with the 30% gain it saw in the same time frame after the fourth halving.
New investors under water
The Glassnode report also highlighted a significant increase in the supply volume held by short-term Bitcoin holders. This surge coincided with the launch of Bitcoin Spot ETFswhich triggered a rapid increase in prices, driven by new solid demand.
Specifically, since January 2024, new investors have started buying, but growth has plateaued in recent months, leading to oversupply. As a result, many new investors are now underwater.
Currently, about 2.8 million BTC are held at a loss, similar to August 2023. The current situation has persisted for 20 days, but is less severe than in 2021, when a comparable trend lasted 70 days and ultimately contributed to a significant market downturn in 2022.
Overall, the analysis noted that after 18 months of steady growth following the FTX implosion, the market experienced three months of sideways trading before entering the deepest correction of the cycle.
Nonetheless, current declines remain relatively mild compared to historical cycles, indicating a solid underlying market structure.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the personal views of the author and do not reflect the views of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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