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Bitcoin is approaching a critical phase, which could signal the end of the bullish market.
Glassnode analytics company has just warned that Bitcoin (BTC) is approaching a critical phase, which in the past has often been seen as a sign of the end of a bull market. Glassnode says they are closely monitoring the Short-Term Holder (STH) Bitcoin Cost Basis, an index that reflects the average value of transactions made by BTC investors holding for less than 155 days. According to the company, historical data shows that Bitcoin tends to enter a downward trend when the value of this currency falls below the cost index of STH. "The cost basis of STH is an important indicator in evaluating the psychology of new investors. According to historical data, this index not only reflects the market bottom in price increase cycles but also helps distinguish between market uptrends and downtrends." Currently, the price of BTC is about 7% higher than the base cost level of 88,135 USD. If the price of Bitcoin continues to stay below this threshold, it may indicate a weakening in the psychology of new investors, and this is often a sign of a market trend shift.
When looking at long-term investors, those who have held Bitcoin for over 155 days, Glassnode believes that this group is currently increasing the pace of selling Bitcoin. However, the analysis company argues that strong distribution from long-term hodlers (LTH) does not necessarily signal the end of Bitcoin's price cycle. “Although the current Bitcoin price is about 12% lower than the all-time high, LTH is still distributing, but at a slower pace. However, the recent 30-day change in the Bitcoin LTH supply ratio indicates that the distribution speed may have reached its peak, as seen in previous cycles. In previous cycles, the price continued to rise even after the distribution of LTH reached its peak. This shows that the distribution peak may not necessarily coincide immediately with the macro market peak.
Glassnode concludes its analysis with a note that most HODLers are currently profitable. “It should be noted that the percentage of Bitcoin's supply held by Long-Term Holders (LTH) is currently at 0% losses. Almost all LTH are currently profitable. Historically, when LTH start to suffer more serious losses, that is often a sign of the end of a cycle. However, this has not yet occurred.”