Bitcoin’s Bull Run: Is the End Near?
An evaluation of Bitcoin’s on-chain indicators suggests that short-term traders have been capitalizing on profits recently.
After surpassing its previous all-time high (ATH) of $69k, Bitcoin set a new ATH at $69,990, as per TradingView data sourced from Binance.
Analysis of CryptoQuant data has revealed interesting patterns in the spent output metrics.
According to CryptoCrypto, long-term holders have not been actively selling over the past month, indicating that a significant price correction may not be imminent.
Exploring Activity Among Short and Long-Term Holders
A CryptoQuant analyst examined Bitcoin’s bull and bear trends since January 2018 using the adjusted Spent Output Profit Ratio (aSOPR) metric, a variation of the spent output profit ratio.
The aSOPR excludes UTXOs with an input-output span of less than an hour to eliminate noise from short-lived transactions, offering a clearer insight into BTC holder behavior.
Research has shown that the average duration of growth periods typically spans 235 days, with the aSOPR being above 1 during these phases. Currently, we are 140 days into the cycle.
This suggests that the next 100–150 days could witness Bitcoin approaching a local peak, possibly the peak of this bull run.
While not a definitive forecast or financial advice, this analysis warrants further scrutiny. CryptoCrypto amalgamated insights from the aSOPR with spent output age bands to assess selling behavior among short and long-term holders.
Sale of Younger Bitcoins
Data reveals that long-term holders, particularly those holding 18-month to 5-year-old BTC, experienced a surge in spent outputs in mid-January, coinciding with a price correction from $49k to $38.5k.
Although not every movement results in an immediate price response, historical patterns indicate a subsequent reaction after a delay. For instance, in July 2023, prices began to decline two weeks post a surge in spent outputs among older age bands.
Over the past six weeks, there has been limited activity in spent outputs in the 18-month and older bands, despite an uptrend in aSOPR, indicating profit-taking by short-term traders.
As such, concerns regarding a significant price correction akin to mid-January seem unwarranted at present.
Data from Santiment on Weighted Sentiment reflects substantial positivity surrounding Bitcoin in recent weeks, aligning with its proximity to all-time highs.
Noteworthy is the declining mean coin age, suggesting a distribution phase occurring across the network.
Amidst the declining mean coin age and rising aSOPR, it appears that short-term holders are capitalizing on profits, likely involving younger coins based on spent output age bands, reassuring investors against anticipating a substantial price correction.