What is the degree of proximity between the current “Bitcoin cycle” and the peak of the bull market that it has reached? Past evidence suggests that the outcome may be more hotly contested than most people anticipate.
On Monday, a prominent analyst at Glassnode named James Check presented a chart that compared the price movement of Bitcoin (BTC) over the past three years with previous instances when Bitcoin reached its peak.
From the Perspective of Glassnode, the Bitcoin Cycle Has Reached Its Peak
After conducting an analysis, Check has determined that Bitcoin is currently in a position strikingly comparable to that of December 2020. During that time period, the asset reached its highest point ever, surpassing the previous record of $19,600 established on December 12, 2017. Following a period of anticipation that lasted for three years, this remarkable accomplishment was finally accomplished, and the asset’s value skyrocketed to $64,000 in a matter of months.
The cryptocurrency Bitcoin is currently experiencing a situation that is strikingly similar to one that it has experienced in the past: approximately 35 months after reaching its peak in April 2021, the cryptocurrency has experienced a resurgence.
It has risen to a notable high of $74,000 in March 2024. Due to the fact that investors who had been holding onto their investments for a considerable amount of time decided to cash out, it also experienced a temporary decline last week. This is comparable to significant price drops of twenty percent to thirty percent that occurred in previous market cycles.
“I choose April because that’s when the negative sentiment of the bear market began, and therefore, the duration of recovery should be calculated from that moment,” Check further explained.
2021 Was an Incredibly Successful Year for Bitcoin
2021 was the year that Bitcoin’s price reached its all-time high, reaching $69,000 in November. On the other hand, Glassnode has previously brought attention to the fact that the actual “peak” of Bitcoin’s price occurred in April 2021, according to on-chain behavioral analysis. During this period, long-term holders began selling off large quantities of their coins, which was similar to what had happened during previous cycles.
At the beginning of this month, it was noticed that this decline is already taking place compared to the previous year. It was during that period. The rate at which holders who have been holding onto their coins for a considerable amount of time were selling off their holdings was 257,000 BTC per month. In comparison, the higher rates of 319,000 BTC and 836,000 BTC that were observed during significant market expansions in 2019 and 2021, respectively, are a substantial departure from the current situation.
What Path Will Bitcoin Take in the Future?
According to the analyst’s observations, even small-scale Bitcoin investors, who are frequently referred to as “shrimp,” are now beginning to sell their coins. Considering their previous commitment to accumulating and maintaining their investments throughout the bear market, this comes as quite a surprise.
Check, on the other hand, has reported that he is extremely optimistic about the current state of the market and has described it as one of the most robust bull markets in the world’s history. In a post on his Twitter account on Sunday, he stated, “In my opinion, consolidation and some bearish movement are likely to persist for weeks to months.”
Earlier in the year, a knowledgeable individual predicted that Bitcoin would surpass $250,000 per coin by the time the bullish phase of the cryptocurrency’s price trend came to an end.
On Monday, the price of Bitcoin experienced a significant increase of 4%, which enabled it to surpass the $70,000 mark. A recent pullback and significant outflows from the Grayscale Bitcoin Trust (GBTC) have led to this recovery, which comes after said pullback. The outflows from the exchange-traded fund (ETF) do not appear to have decreased on Monday, amounting to $350 million. This is a curious behavior.
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