HODLing Bitcoin: Decoding Duration to BTC Peak in Bull Cycle

Key Points

• The Realized Cap signals suggest that Bitcoin [BTC] has not reached the peak of this cycle yet.
• High long liquidations indicate that most positions wiped out are those betting on a price hike.

Bitcoin [BTC] has not reached its peak in this cycle, as indicated by the Realized Cap signals. The Realized Cap tracks the value of each Unspent Transaction Output (UTXO) based on the price when it was last moved, compared to the current value of the coin.

UTXO represents the amount of Bitcoin left after a transaction. Analysis of CryptoQuant’s data revealed that the UTXO Age Bands are not close to the zenith that was hit during the 2021 bull market. This metric measures active individual purchases in the market. When this metric is high, it implies a lot of money is flowing into Bitcoin, indicating the end of the bull cycle could be close.

Bitcoin’s Potential Rise

However, the percentage remains much lower than its previous peak. This data suggests that BTC’s price may climb past its $73,750-high from March. Crypto Dan, an analyst, shared a similar view, stating that Bitcoin has only achieved 20% of this bull cycle. He noted that the current short-term money inflow situation is significantly smaller than the peak of the past bull cycle.

Checkmate, an on-chain analyst, focused on the derivatives market. He shared that the 2021 peak was marred by a surge in long liquidations, which usually signals the market has topped out. Liquidations occur when a trader’s position is closed due to an insufficient margin balance to keep it open. High long liquidations imply that most positions wiped out are those betting on a price hike. However, this year, most liquidations have been short, reinforcing Bitcoin’s potential to hit a new all-time high.

Coin Days Destroyed (CDD)

The Coin Days Destroyed (CDD) metric shows if HODLers are actively spending their coins or accumulating more. A high CDD indicates a surge in spent coins and could lead to a price decrease. However, a hike in the metric happened on 24 March, following which Bitcoin’s price tumbled. At the time of writing, the CDD had returned to the baseline it occupied in 2020, before the explosive run of 2021. Since HODLing continues to be the preferred option of investors, Bitcoin might still produce a monster rally before this cycle hits its peak.