• Since hitting $31,700, Bitcoin has been silently preparing for a historical repeat.
• Short-term holders could soon be less profitable than their long-term counterparts.

For the past few days, the crypto market, led by Bitcoin [BTC], has been relatively quiet. And based on Glassnode’s on-chain newsletter, the constraint experienced depicts that of slow and steady liquidity, similar to the 2016 and 2019/2020 periods.

Read Bitcoin’s [BTC] Price Prediction 2023-2024

One area the on-chain analytic platform considered in explaining the above was the realized cap. For context, the realized cap measures the estimated cost of acquiring Bitcoin compared to the last price traded.

Capital returns, bring compression

The Glassnode data went ahead to compare the realized cap in 2020 into 2022 to the current one. Prior to the aforementioned period, Bitcoin had initially experienced massive capital outflows. 

But the recovery began in March 2020. And later in 2021, there was a bull market where the realized cap increased by 348%. 

Like the incident in 2020, Bitcoin was experiencing a capital inflow recovery after a massive drawdown in 2022. So, there could be a chance that another bull market was not far away, But Glassnode was quick to mention that,

Recovery of the realized cap ATH in prior cycle

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Author: Victor Olanrewaju

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