Bitcoin Hodl Patterns Indicate a Cycle Shift to a Bull Market
Glassnode, a blockchain data analytics platform, points out that there has been a “sudden rotation of capital that started when FTX plummeted.” It goes on to say that the coin has shifted from long-term holders to a new group of buyers.
This shift in hodl patterns has been observed in previous cycles and could be an “inflection point, indicating a change in the tides,” according to the study. Bitcoin price has recovered from the CFTC’s targeting of Binance and this week’s bogus Interpol report. The market, however, is still consolidating for now.
Glassnode developed RHODL statistics on April 3rd which compares the wealth held by a single cycle Long Term Holder (6m-2y) to the wealth held by the youngest Short Term Holder (1h-3m). Based on this explanation, the ratio seeks to assess the rotation between extreme holding and distribution locations.
The current structure, which is falling rapidly, implies that BTC is shifting from long-term to short-term holders, a trend that has increased since FTX’s demise. Market Value to Realized Value (MVRV) ratio is also examined. It is used to calculate the multiple of the unrealized profit held in the coin supply.
According to Glassnode, the indicator is currently at 1.4, “which is more in line with the recovery phase.” The Accumulated Trend Score also indicates that the market is in a transitional recovery period. The net flow of coins to and from wallets with little or no spending history is measured using the Change in Net Position of Iliquid Supply metric. This increased by 36,600 BTC per month, indicating increased confidence in the asset.
“This is consistent with our previous observations of HODLers, and adds to the argument for continued market sentiment, despite the backdrop of regulatory pressures.” At the time of writing, the bitcoin price was up 2.7% on the day to $28,629 USD. They have recovered to weekly highs, despite the negative news and regulatory pressure.
Moreover, the Bitcoin fear and greed index has shifted to ‘greed’, implying that a correction is imminent. BTC is up 28% in the last month, but is still down 58.5% from its all-time high of $69,000 in November 2021.