Despite the optimistic signs of re-accumulation and bullish sentiment, Glassnode highlights that the current bitcoin bull cycle appears to be more tempered compared to historical cycles.
Renowned market intelligence company Glassnode recently revealed an important change in the behavior of long-term Bitcoin holders, as they have returned to the re-accumulation phase for the first time since December 2023. As the latest data reveals, Bitcoin, while trading just under an all-time high, entered a phase where the long-term holders are starting to increase their holdings once again.
This behavior follows a period of significant divestment earlier this year, coinciding with Bitcoin’s price surge to a new peak of $73,000 in early March. The growth prompted a selling wave from long-term holders, which created an overhang of supply and contributed to a subsequent consolidation phase for BTC. However, in recent weeks, the pressure to sell from these holders has reduced and given way to a phase of re-accumulation.
Further to the Glassnode analysis, on-chain analytics firm 0nchained corroborates that cohorts holding bitcoin for more than one year and two years have stopped selling. It states:
“The 1-year+ and 2-year+ cohorts have transitioned from a distribution phase to a holding phase.”
A Rise in Demand
Glassnode also points to renewed buy-side demand indicators, notably highlighted by major net inflows into spot bitcoin exchange-traded funds (ETFs). As per the latest data, these products have amassed an average of $242 million per day last week.
This influx contrasts sharply with the daily sell pressure created by miners since the halving, which averaged $32 million per day. The report explains:
“Considering the natural daily sell pressure by miners, these ETFs’ buy pressure is almost 8 times larger. This highlights the size and scale of the ETF impact, but also the relatively small influence of the halving moving forwards.”
“As the market approaches new all-time highs and enters price discovery, we observe the beginning of the Euphoria phase, characterized by 93.4% of bitcoin supply held in profit,” Glassnode noted. Notably, this phase typically lasts 6-12 months and indicates a period where holders are content to keep their holdings, anticipating further price rise.
The analysis underscores a nuanced approach by long-term holders, balancing between profit-taking and anticipating further price appreciation.
A Comparison with Past Bull Cycles
Despite the optimistic signs of re-accumulation and bullish sentiment, Glassnode highlights that the current bitcoin bull cycle appears to be more tempered compared to historical cycles.
Over the past three months, bitcoin has seen weekly, monthly, and quarterly gains of over 3.3%, 7.4%, and 25.6%, respectively, on just five occasions out of the last 90 days. However, historical data shows that in previous market cycles, these gains occurred more frequently, typically between 18 and 26 days within a 90-day period. “This indicates that the current market sentiment may be more measured relative to historical bull markets,” according to the analysts.
next