On-chain data shows Bitcoin is currently likely to follow the same pattern as in the previous cycle according to this indicator.
Bitcoin May Now Enter Phase 2 of Bull Run
In a CryptoQuant Quicktake post, the analyst pointed out that the recent trend in Bitcoin the long-term supplier has been reminiscent of what was seen in the 2017 cycle.
Long-term holders (LTHs) make up one of the two main segments of the BTC userbase that are made on a time-holding basis, while the other side is known as short-term holders (STHs).
The cutoff between these two groups is 155 days, and investors who bought within this window are part of STHs, while those who hold from above fall into LTHs.
Statistically, the longer an investor holds onto their money, the less likely they are to sell the coins at any time. Therefore, LTHs are considered to involve the strongest market participants.
Below is a chart showing the trend in the combined amount of supply held by the participants of the respective Bitcoin groups.
As can be seen in the graph, the supply of Bitcoin LTH saw a significant drop back during the first quarter of the year, suggesting that even these diamond hands could not resist the temptation to take profits.
Alongside this decrease in LTH supply, STH supply has naturally increased, as whenever LTHs transfer their tokens to the blockchain, they become part of the STH pool instead.
Recently, LTH supply reversed this decline from the beginning of the year, but with the recent rally to the all-time high (ATH), the metric has again changed directions.
In the chart, the price has highlighted how the same pattern was also witnessed back during the 2017 cycle; the first phase of diffusion from LTHs was followed by accumulation, which then led to the second phase of diffusion.
It is possible that the latest change in the supply of LTH is the start of the phase 2 distribution of the current cycle, where new money comes in to get the coins out of the hands of HODLers.
LTH supply is not the only metric showing a trend similar to that of the previous cycle. As the chart shared by the analyst shows, the Binary Binary CDD also forms an interesting pattern.
Binary Coin Days Destroyed (CDD) basically tells us about whether HODLers are selling below or above the historical average. From the graph, it appears that the 152-day moving average (MA) of this metric may indicate a second breakout similar to that which led to the 2021 bull run.
BTC price
Bitcoin continues to be in ATH testing mode as its price is trading around $75,900.
