Bitcoin Hodl Patterns Indicate Cycle Shift to Bull Market

Blockchain data analytics platform Glassnode revealed that there has been a “sudden rotation of capital that started when FTX collapsed,” It added that coins have been transferred from long-term owners to a new cohort of buyers.

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

Bitcoin prices have shaken off losses caused by the CFTC targeting Binance and this week’s fake Interpol news. However, the markets are still in consolidation for now.

ICYMI: The current structure of #Bitcoin The RHODL ratio suggests a noticeably abrupt rotation of capital starting when FTX collapsed, with coins being transferred from long-term owners, towards a new group of buyers.

This sharp drop in the RHODL ratio can be seen in previous 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 of one-cycle long-term holders (6m-2y) with the youngest short-term holders (1d-3m).

The ratio aims to measure the rotation between the extreme points of hoarding and distribution, it explained.

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

Furthermore, the ratio between market value and realized value (MVRV) was also analyzed. This is used to measure an overall unrealized profit multiple held within the coin supply.

The estimate is currently at 1.4, “which is more consistent with a recovery phase,” according to Glassnode. An accumulation trend score also suggests that the markets are in a transitional phase of recovery.

An illiquid supply net position change calculation was used to measure the net flow of coins to and from wallets with little or no history of spending. This increases by 36,600 BTC per month, suggesting increased confidence in the asset.

“This is consistent with our previous observations relating to the HODLs, and provides further evidence for a case of continued confidence in market sentiment, despite regulatory pressure.”

BTC Price Outlook

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

Furthermore, the Bitcoin Fear and Greed Index has crossed into “Greed”, suggesting that a correction may be around the corner.

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

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

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