Key Points
- Bitcoin’s weekly trend has been on a slow downtrend since early June, but it is still considered mid-cycle.
- On-chain metrics suggest that Bitcoin’s cycle top might be a year away.
Bitcoin [BTC] has been experiencing a gradual downtrend since the beginning of June, marked by lower highs and lower lows on the weekly chart. Despite this, CryptoQuant’s Founder and CEO, Ki Young Ju, maintains that Bitcoin is still in the middle of its cycle.
Ki Young Ju pointed out that the BTC Coinbase spot volume dominance has returned to its early 2024 levels, before the approval of the spot ETF. He believes this is not a bullish development and that an increase in U.S investors is necessary to push Bitcoin to its highs.
On-Chain Metrics Show Hope
On-chain metrics were used to determine whether Bitcoin’s cycle is indeed only halfway through. The results were promising. The UTXO age bands displayed the distribution of realized cap across different UTXO age bands. The chart represents the ratio of the realized cap of spent UTXOs that were moved.
The 3-month to 2-year UTXO ages show sharper peaks and valleys at different points in the cycle. As the market tops, these age bands drop sharply, forming bottoms roughly around the market top. The following downtrend sees them climb higher, indicating more holders re-entering the Bitcoin market as buyers.
Market Timing and the Puell Multiple
The Puell multiple can help identify market tops and increased selling pressure from miners. Similar to the UTXO bands, it also forms peaks between cycles, signaling miners taking profits before the halving to remain in business.
The most recent peak happened in March 2024, further supporting the notion that Bitcoin is only halfway through its current cycle.
