Bitcoin Price Aligns With Previous Cycles — Long-Term Holders Begin Taking Profit
Comparing Bitcoin's Market Cycles | Credit: Hameem Sarwar
Key Takeaways
- Bitcoin’s increase is in line with that of its previous cycles.
- Long-term BTC holders have started to take profits.
- How long will Bitcoin’s bullish market cycle continue?
The Bitcoin price increased by over 40% in November, culminating with a new all-time high on Nov. 22. This caused Bitcoin long-term holders to take profit on their unrealized gains, a behavior not unlike the previous cycles.
Considering that, let’s compare the Bitcoin price performance to the previous cycles and use the LTH behavior to attempt to predict a date and price for the top of this market cycle.
Bitcoin Compared to Other Cycles
The Bitcoin price has increased rapidly, reaching a new all-time high on Nov. 22. The upward movement aligns with both the 2015-2018 (blue) and 2018-2022 (green) market cycles. At this point (black circle), the BTC price had increased by 480% in the former and 590% in the latter. Comparatively, it has increased by 560% in the current cycle.
The only cycle that differs is the 2011-2015 one (red). The cycle was much more rapid, and BTC had increased by 29,200% at the same point in time. This is to be expected because of diminishing returns.
Diminishing returns were also visible in the difference between the two previous cycle highs. While both had similar returns at this point, the 2011-2015 one had a 10,000% increase at the cycle top while the 2018-2022 one had a 2,000% increase.
Despite this difference in magnitude, both cycles had the same length.
If the current cycle has the same length as the previous ones, it will continue moving upward until October 2025. A 1,000% increase from the cycle low would take the BTC price to $168,000.
Long-Term Holders Take Profit
As the Bitcoin price has reached new highs, long-term holders have started to take profit. This is clear by several on-chain indicators. Firstly, there has been a significant uptick in long-term holder Net Unrealized Profit/Loss (NUPL) going on since September (black arrow).
However, the NUPL is still below March 2024 levels. More importantly, the indicator is not in the Euphoria stage (blue) yet, marked by a reading above 0.75. The LTH NUPL reached this level in both previous cycles.
Next, the long-term holder Market Value to Realized Value (MVRV) alongside spending levels can help determine market cycle transitions.
In the previous cycles, periods, when spending and MVRV were high (green), spelled the market cycle tops. This happened twice before the price began its bear market. Conversely, the opposite occurred during the November 2021 bear market bottom.
In the current cycle, these conditions were created again in March 2024 when the BTC price reached a local top, and they are happening with the all-time high break. Historically, this has marked the beginning of the most rapid portion of the increase, when long-term holders realize their considerable unrealized profits.
However, it is worth noting that these periods lasted for several months before the BTC price finally reached its high.
It is also intriguing to note that while whales are selling, ETF inflows are increasing almost proportionally, noting a change of hands from long-term holders and whales to institutional buyers.
Several Bullish Months Ahead
Bitcoin’s rapid increase in November has taken the rate of increase back in line with the previous cycles. During the all-time high break, long-term holders have started to take profits.
When analyzing the LTH behavior and the BTC price performance relative to previous cycles, the bullish trend may resume for several months, possibly lasting until the final quarter of 2025.
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