The role of Bitcoin long-term holders (LTH) has once again come under the analyst microscope as the asset currently faces a 4.5% correction from its all-time high (ATH) above the $100,000 created on Thursday.
These holders, defined as those who hold their Bitcoin for more than 155 days, are known to significantly influence market movements through their accumulation and distribution behaviors.
A recent analysis by CryptoQuant analyst Datascope has highlighted key trends in LTH activity that could signal the next phase for Bitcoin.
Key trends and historical context
Datascope insights highlight the importance of the LTH accumulation/distribution ratio as an on-chain metric. This ratio reflects whether LTHs are accumulating Bitcoin, which indicates market bottoms, or liquidating holdings during price spikes, which often indicates corrections.
The historical patterns of 2013 and 2017 saw LTHs make substantial sales at market highs, while periods like 2019 and 2020 were marked by intense accumulation, paving the way for bull markets.
According to Datascope analysis, the peaks of 2013 and 2017, which were characterized by increased sales activity by LTHs, correlated with significant price corrections.
These corrections, driven by profit-taking, marked the culmination of bullish cycles. In contrast, during the 2019 and 2020 lows, LTHs showed strong accumulation trends, indicating confidence in Bitcoin’s long-term potential and laying the groundwork for subsequent price increases.
Now, in 2024, Datascope noted that the LTH metric once again provides critical information about market conditions. Recent data reveals increased selling activity among LTHs, a behavior seen during periods of market overheating or resistance to current price levels.
While this trend could signal an imminent correction, it also raises the possibility of the market moving into a new accumulation phase. Echoing this, a recent report from CryptoQuant reveals that there has been sustained buying pressure from US investors.
Bitcoin surpasses $100,000 as institutional demand drives the market.
The Coinbase Premium Index highlights sustained buying pressure from US investors. pic.twitter.com/eZvKFCmVxs
– CryptoQuant.com (@cryptoquant_com) December 5, 2024
Current Perspective on Bitcoin
Bitcoin has continued to see a drop in price after the ATH of $103,679 recorded yesterday. At the time of writing, BTC has fallen 2.2% in the last 24 hours with a current trading price of $99,208.
Regardless of this, the asset seems to continue in an upward trend. Over the past month, Bitcoin is still up approximately 33.6% with a current market capitalization of $1.965 trillion.
datascope, commenting on the current Bitcoin market outlook, wrote:
The market is at a crossroads, potentially entering a new bull cycle or consolidating before a deeper correction. With Bitcoin in an “overheated” zone, investors should exercise caution and evaluate profit-taking opportunities.
Featured image created with DALL-E, TradingView chart
