Bitcoin Hodl Patterns Indicate Cycle Shift to Bull Market

Blockchain data analytics platform Glassnode revealed that there has been an “abrupt rotation of capital starting as FTX collapsed,” It added that coins have been transferred from long-term holders towards a new cohort of buyers.

This change in hodl patterns has been seen in previous cycles and could be an “inflection point, suggesting a changing of the tides,” it stated.

Bitcoin prices have shaken off losses induced by the CFTC targeting Binance and this week’s fake Interpol news. However, markets remain in consolidation for the time being.

ICYMI: The current structure of the #Bitcoin RHODL ratio suggests a notably abrupt rotation of capital starting as FTX collapsed, with coins transferring from long-term holders, towards a new cohort of buyers.

This sharp decline in the RHODL Ratio can be seen in prior cycles to… pic.twitter.com/uiBw8u0DAF

— glassnode (@glassnode) April 4, 2023

Bitcoin Cycle Shift

On April 3, Glassnode introduced a RHODL metric that compares the wealth held by single-cycle Long-Term Holders (6m-2y) to the youngest Short-Term Holders (1d-3m).

The ratio aims to gauge the rotation between the extreme hodling and distribution points, it explained.

The current structure, which is in steep decline, suggests BTC is transferring from long-term holders to short-term holders, a pattern that accelerated following the demise of FTX.

Furthermore, the Market Value to Realized Value (MVRV) ratio was also analyzed. This is used to measure an aggregate unrealized profit multiple held within the coin supply.

The metric is currently at 1.4, “which aligns more closely with a recovery phase,” according to Glassnode. An Accumulation Trend Score also suggests that markets are in a transitional recovery phase.

An Illiquid Supply Net Position Change metric was used to measure the net flow of coins to and from wallets with little to no history of spending. This is increasing by 36,600 BTC per month, which suggests increase confidence in the asset.

“This aligns with our prior observations related to the HODLers, and provides additional evidence to a case of continued confidence in market sentiment, despite the backdrop of regulatory pressure.”

BTC Price Outlook

Bitcoin prices have gained 2.7% on the day to reach $28,629 at the time of writing. They have returned to a weekly high, shrugging off all of the negative news and regulatory pressure.

Furthermore, the Bitcoin fear and greed index has slipped into ‘greed,’ suggesting that a correction may be around the corner.

Bitcoin Fear and Greed Index is 62 — GreedCurrent price: $28,211 pic.twitter.com/8A6sfuLXzw

— Bitcoin Fear and Greed Index (@BitcoinFear) April 4, 2023

BTC is currently up 28% over the past month, however, it remains down 58.5% from its all-time high of $69,000 in November 2021.