The landscape of Bitcoin’s market has seen a significant shift, hinting at potential changes in its long-term direction.
Examinations have uncovered notable activity among holders who have had Bitcoin for an extended period, shifts in market cycles, and events of capitulation, offering valuable insights for cryptocurrency traders navigating the changing dynamics of Bitcoin.
Shifting Market Momentum
The Maartuunn’s 60-day CDD indicator has highlighted sharp increases in activity among long-term holders from January to July 2024 and then again from November 2024 to February 26.
An analysis revealed pronounced spikes, reaching over 24 million coin days destroyed, marking the most significant signal observed since 2021.
Moreover, these increases indicated a rise in spending by long-term holders, who typically consider Bitcoin a store of value. This kind of activity has often been seen before market peaks or increased volatility.
The consistent rise over the past year suggests that long-term holders have been taking profits or adjusting their investments, potentially indicating selling pressure.
This behavior mirrors the peak seen in 2021, where elevated CDD levels indicated a changing point in the market.
Bitcoin Market Cycles: Evolving Patterns
The Bull-Bear Market Cycle Indicator from CryptoQuant suggests a potential shift from a bull market to a bear market by late 2024.
The indicator entered negative territory, dropping to -0.0685 on October 24, 2024, while the 365-day moving average showed a downward trend at 0.25.
This contrast indicates a loss of momentum, which could potentially mark the end of the bull cycle. Historically, negative readings have preceded bear markets, characterized by falling prices and increased selling pressure.
The orange and blue areas on the chart indicate this shift, with a bearish sentiment dampening investor confidence. This trend is reminiscent of the bear market in 2018, where similar declines led to price decreases.
Bitcoin Mining’s Impact on Price Stability
Additionally, the BTC Price vs. Hash Price chart reveals a crucial connection that influences Bitcoin’s price movements. The chart shows instances where Hash Price dropped to low levels, aligning with Bitcoin price bottoms.
Historically, lows in Hash Price in 2015, 2019, and 2023 signaled market bottoms, suggesting that the current low Hash Price in early 2025 could indicate that Bitcoin is approaching a price bottom.
Despite recent price fluctuations, the ongoing bullish trend indicates that as Hash Price decreases, price recoveries have typically followed.
This pattern suggests that miners may be experiencing reduced profitability, but Bitcoin’s price resilience suggests sustained demand.
Capitulation in Bitcoin Profitability
Moreover, the realized Profit and Loss chart for Bitcoin captured a significant capitulation event on February 25, 2025, marking the most substantial capitulation event since August 2024.
Less experienced investors offloaded over 79,000 BTC at a loss, totaling $1.7 billion in realized losses.
This spike resembles the capitulation event of August 2024 after Japan’s interest rate hike, which signaled a market bottom and was followed by a recovery to $100,000 by December 2024.
Furthermore, the sharp drop in realized profits on the chart indicates panic selling. However, historical trends suggest that this could signal a price floor.
A thorough analysis can help identify this rare opportunity, as such capitulation events often precede medium-term price stability and growth.