The Bitcoin market is currently at a cycle inflection point.
Long term BTC holders are selling their coins to short term investors.
Analysts predict the price of BTC to reach $100, 000 in 2024 after the next halving event.
The value of BTC is likely to fluctuate around $532,000 in 2025.
Keywords: Bitcoin market, BTC market, Bitcoin price, BTC price, Bitcoin trading, cycle inflection point, Bitcoin wealth.
Introduction
Many people use the supply of Bitcoin to analyze capital inflows in the crypto market as well as to observe the behaviour of investor cohorts. Usually, the market analyzes the supply of Bitcoin using wallet sizes and the number of days BTC has been in the wallets.
Today, we discuss the current trend in the supply and demand for Bitcoin using entity cohorts. We will also look at the current distribution of Bitcoin among investors.
Bitcoin holding period strengthens
The market statistics show that there has been a transfer of Bitcoin from seasoned holders to new market participants which suggests a possible bullish trend. This transfer in BTC holdings indicates that Bitcoin is within an accumulation period. A new trend emerged in the Bitcoin market after the collapse of FTX, the centralized exchange.
Glassnode recently introduced a metric called Realized HODL (RHODL) Ratio that shows the distribution of wealth (BTC) between the short-Term Holders (1d-3m) and Long-Term Holders (6m-2y).
In other words, the RHODL ratio is a market indicator that shows the ratio of BTC that new market entrants (between 1 and 3 months) HODL to that which experienced holders (between 6 months and 2 years) own. This metric helps to forecast the points when the price of BTC is likely to have pullbacks.
Currently, the RHODL ratio has been declining, meaning that BTC is moving from long term hodlers to short term ones. The following graph shows the change in BTC holdings between the long term holders and short term ones.
Read also: HODL & Earn - The Best Way to Earn Cryptocurrency
Bitcoin Cycle Shift from 2010 to 2022 - Glassnode
As you observe on The Graph, at the end of 2022 there was a decline in holdings of the long term BTC holders. That trend continued into 2023 and is indicating the transfer of BTC from long term holders to short term ones.
To this effect, Glassnode revealed that there was an 86% surge in BTC holding of the "one-day to three month" HODL band within the last three months that stretched up to May. During that period the Bitcoin transacted increased from 11.5% to 21.4%, a sign of a bullish market trend.
It is important to note that the supply of BTC which is less than three months is very liquid and the investors are likely to spend it during periods of high market volatility. This supply is also referred to as "young coins," during bull markets when the long term hodlers sell off their assets. The next image shows the change in young coins.
The increase in young coins in May 2023 - Glassnode
The fact that long term BTC holders are transferring the coin to new investors indicates that BTC is at a cycle inflection point.
According to a crypto analyst Philip Swift, the one year HODl wave will trend down and Bitcoin price ($BTC) will likely rise. This is because when new investors enter the BTC market the existing holders sell their coins at a higher price. In other words, bitcoin trading will increase.
Bitcoin market consolidation
Bitcoin has shown its resilience in the face of regulatory pressures. Also, it has maintained its consolidation. As a fact, the BTC price rose significantly between 26 May and 1 June. However, it lost minimally from the start of June till the time of writing. The next diagram shows BTC’s price performance since 12 May.
Bitcoin Price Performance – CoinGecko
As you note on the graph the value of BTC has been fluctuating between $26,000 and $28,000. The only time its price fell below $26,000 during the period was on 6 June. At the time of writing, 9 June, the price of Bitcoin is $26,620 after gaining 0.92% within the last 24 hours.
Read also: Impending $780 BTC Options: Will Bitcoin Price React
Generally, the market expects the price of Bitcoin to increase between now and 2025 as we wait for the next bitcoin halving event to take place in 2024. Plan B, a famous Bitcoin analyst, predicts the price of BTC to reach $532,000 in 2025, a year after the next Bitcoin halving event. He used his famous S2F prediction model to reach that conclusion.
According to him, the price of BTC will shoot above $100,000 after the halving event in 2024. Basically, the next bitcoin halving event, expected to take place in March 2024, will reduce the mining reward per block from 6.25 to 3.125 BTC. The following diagram shows the expected BTC price movements up to 2025.
BTC Price Prediction – Binancefeed
As seen in the diagram, the BTC price is likely to reach $100,000 in 2024 and $532,000 in 2025.
How to buy Bitcoin at Gate
It is important to note that investors can buy and Hodl BTC on crypto exchanges. Gate is one of the most secure and reliable centralized crypto exchanges where you can purchase BTC using different methods like wire transfer and credit cards. To do so, click on Buy Crypto on the web platform and select the method of payment such as credit card, P2P and Bank transfer you want to use. Then follow the prompts and input the required details.
As you see in the diagram, you can pay with Bank Transfer, P2P Trading, Credit card or Gate Card.
Conclusion
The current market shows a Bitcoin wealth transfer process as long term holders sell off their holdings to short term investors. In the last three months there was an 86% rise in the one-day to three month band holdings. The current market scenario shows that BTC is in a consolidation phase and its price is likely to start rising in the near future.
