According to analytics firm Glassnode, Bitcoin (BTC) is expected to face a period of “boredom” lasting up to one-and-a-half years as the bull market gathers momentum. In its latest weekly newsletter, “The Week On-Chain”, the firm predicted an “arduous” time for BTC holders as the cryptocurrency struggles to hold its ground, despite gaining 70% in the first quarter of the year.
Analysis
Glassnode’s researchers investigated the “liveliness” of the BTC supply, which they describe as “the propensity of Bitcoin holders to spend or hold their coins” and found that there is mass accumulation. The researchers explained that “HODLers are currently accumulating coins at a rate of around 42.2K BTC/month, suggesting that the price-insensitive class are absorbing a non-trivial portion of the currently available supply.” They also revealed that the decreasing exchange balances indicate that the supply is becoming increasingly illiquid, out of reach in private cold storage and not for sale.
The researchers found that the more speculative end of the hodler base, known as short-term holders, is also in focus currently. These investors have held coins for a maximum of 155 days, and their aggregate cost basis, which sits at around $26,400, is on the radar as a short-timeframe support zone.
Glassnode noted that based on wallet entity size, not everyone is in accumulation mode, with whales, the largest-volume cohorts, currently “net distributors.” However, the market still appears to be in a period of quiet accumulation, with an undercurrent of demand despite the regulatory headwinds of late.
Glassnode believes that for a seismic trend shift to occur, it will take another halving to come and go. The researchers concluded that “the classic pattern of wealth transfer towards the price-insensitive HODLer cohort remains uninterrupted. If past cycles are any guide, it suggests that a period of apathetic sideways boredom may well define the road ahead, potentially lasting between 8 to 18-months in duration.”
While some believe that a dramatic uptick will characterize the coming year, others think it will take longer, perhaps until 2025, for a new all-time high to hit. Glassnode sees signs that a classic pre-bull market phase is playing out, but long-term holders will still need considerable patience.
Glassnode’s prediction of a “boring” but steady market for Bitcoin may seem discouraging to some investors. However, the accumulation of coins by HODLers at a steady and gradual rate suggests that demand remains strong, despite regulatory pressures. The decreasing exchange balances indicate that the supply is becoming increasingly illiquid, out of reach in private cold storage and not for sale. While a seismic trend shift may take another halving to come and go, Glassnode’s analysis suggests that the road ahead for Bitcoin may be defined by a period of apathetic sideways boredom, lasting between 8 to 18 months in duration.
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