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The current Bitcoin (BTC) price cycle is rhyming with the past three instances, according to a report published today by on-chain analysis firm Glassnode. The last three cycles have shown a striking similarity in their performance trends, although the current one is managing to stay slightly ahead of the 2016-17 and 2019-20 periods.
A deeper dive into the market’s behavior reveals a robust level of resilience in the current cycle. Corrections from local highs have been relatively moderate, with the most significant drawdown recorded at -20.1% in August 2023. This resilience is further highlighted when comparing the proportion of days with deeper corrections across different cycles, showcasing a decreasing trend in market volatility over time.
Yet, recent weeks have seen a downtrend in price momentum, influenced by the market’s adjustment to the introduction of spot Exchange-Traded Funds (ETFs) in the US. The Short-Term Holder Cost Basis, currently at $38,000, and the True Market Mean Price, at $33,000, are pivotal in understanding the market’s stance.
These metrics offer insights into the average acquisition price of new demand and a cost basis model for active investors, respectively, serving as critical indicators for market sentiment and potential shifts.
Retests of the Short-Term Holder Cost Basis as support are commonplace during uptrends, but a significant breach of this level could shift focus to the True Market Mean Price. This price level, often seen as the market’s centroid, plays a crucial role in distinguishing between bull and bear markets.
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Author: Gino Matos
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