In just a few months, Bitcoin has gone from business as usual to booming, doubling, then redoubling its value in a parabolic spike up to over $50,000 per coin, as of press time.
However, some analysts looking at the horizon are seeing the bull market around Bitcoin as likely to erode sometime soon.
One of the biggest signals has to do with different kinds of Bitcoin holders and categories of investors.
Writing at Cointelegraph today, Martin Young talks about research by Glassnode that shows a decline in Bitcoin whales, but a “persistent accumulation” among smaller holders.
“The (Glassnode) report stated that bull markets generally follow a similar wealth transfer path over three distinct phases, which can be used to estimate what stage the current cycle is in,” Young writes. “Peak hodl phases are inflection points where the largest proportion of long-term holder, or LTH, owned coins are in profit.”
Citing the firm’s ‘reserve risk’ metric, Young chronicles its findings: that long term holders are now transferring their coin to new buyers.
A sustained trend of big-money buy and hold Bitcoin owners selling out to newcomers with less capital certainly does look like a selloff…! There’s also other anecdotal and cluster trend activity, like this report from Yasin Ebrahim at Investing.com March 15:
“The selloff in Bitcoin steadied Monday amid a heated debate in the cryptosphere on whether a large holder, or whale, was preparing to dump more than a billion dollars worth of bitcoin, pushing down the price,” Ebrahim writes.
Then, too, there’s the economic recovery promised by many experts looking at how we claw our way out of the coronavirus pandemic era as vaccinations proceed.
With this in mind, some are calling for Bitcoin to eventually go as low as $25,000, or less than half of its current price. Is Bitcoin overbought or overvalued? Do your own research and act accordingly.