Bitcoin Deja Vu: Indicator Mirrors Pattern That Led To 2021 Top

On-chain
data
suggests
a
Bitcoin
indicator
is
currently
mirroring
the
same
trend
that
led
to
the
top
of
the
bull
run
in
2021.

Bitcoin
Long-Term
Holder
Distribution
Appears
To
Be
Ending

As
explained
by
CryptoQuant
community
manager
Maartunn
in
a

post
on
X,
the
BTC
long-term
holders
are
currently
showcasing
a
trend
that’s
reminiscent
of
2021.

The
“long-term
holders”
(LTHs)
are
Bitcoin
investors
who
have
been
keeping
their
coins
dormant
(that
is,
not
transferring
or
selling
them
from
their
wallet)
for
more
than
155
days.

Generally,
the
longer
a
holder
keeps
their
coins
still,
the
less
likely
they
are
to
move
them
at
any
point.
As
such,
the
LTHs,
with
their
long
holding
times,
are
considered
the
market’s
resolute
hands.

These
investors
usually
don’t
react
to
events
in
the
wider
market,
like
a
rally
or
crash,
but
this
year’s
price
surge
towards
the
new
all-time
high
(ATH)
has
forced
even
these
HODLers
into
selling.

The
chart
below
shows
the
trend
in
the
total
Bitcoin
supply
held
by
the
addresses
belonging
to
the
LTH
cohort
over
the
last
few
years:

Looks like the value of the metric has observed a drawdown in recent months | Source: @JA_Maartun on X

As
the
graph
shows,
Bitcoin
LTHs
were
accumulating
between
the
May
2021
crash
and
this
year’s
rally.
With
this
rise
towards
the
new
ATH,
though,
the
supply
of
these
HOLDers
has
started
observing
a
downtrend
instead.

Something
to
keep
in
mind
is
that
the
indicator
has
a
155-day
delay
when
it
comes
to
buying,
as
only
mature
supplies
can
count
under
it.

Thus,
when
the
metric
goes
up,
it
doesn’t
mean
that
there
is
accumulation
in
the
present
but
rather
that
some
buying
occurred
155
days
ago,
and
these
coins
have
just
now
aged
enough
to
count
under
the
LTHs.

For
selling,
though,
no
such
delay
is
attached,
as
coins
exit
the
group
as
soon
as
they
are
transferred
on
the
network.
As
such,
the
latest
decline
would
correspond
to
a
selloff
that
has
been
happening
in
the
present.

Recently,
as
the
Bitcoin
price
has
fallen
prey
to
stagnation,
the
LTHs
have
slowed
down
their
selling,
with
the
supply
more
or
less
moving
sideways.
As
Maartunn
has
highlighted
in
the
chart,
this
trend
is
similar
to
what
was
observed
in
2021.

The
LTHs
ending
their
distribution
then
meant
a
top
for
the
cryptocurrency.
A
similar
pattern
was
also
witnessed
during
the

2017
bull
run.
Therefore,
going
by
these
historical
precedents,
the
latest
flat
movement
in
the
LTH
supply
could
also
suggest
a
potential
peak
for
the
latest
bull
run.

This
is
only
if,
of
course,
the
LTH
distribution
has
truly
ended.
The
chart
shows
that
in
each
of
the
last
two
bull
markets,
the
initial
sharp
selling
from
the
LTHs
was
followed
up
by
a
phase
of
slower-paced
distribution.

This
slowed-down
decline
continued
for
months
before
the
metric
reached
the
consolidation
phase
and
the
asset’s
top
occurred.
It
now
remains
to
be
seen
if
the
latest
trend
shift
in
the
Bitcoin
LTH
supply
corresponds
to
the
former
or
the
latter
phase.

BTC
Price

At
the
time
of
writing,
Bitcoin
is
floating
around
the
$62,700
level,
down
almost
2%
over
the
past
week.

The price of the asset appears to have shot up over the past day | Source: BTCUSD on TradingView

Featured
image
from
Shutterstock.com,
CryptoQuant.com,
chart
from
TradingView.com