Bitcoin Dynamics: Price Peaks, Investor Behavior, and Market Influencers

By: Eva Baxter

Researchers have found that Bitcoin price cycles are significantly influenced by the behavior of short-term holders (STHs), typically those who have held the asset for less than 155 days. Data highlights that, during market peaks, STHs often control 80% or above of the Bitcoin supply. The duration that these investors hold Bitcoin is gradually increasing, implying a maturing market.

Moreover, the Market Value to Realized Value (MVRV) ratio, a key indicator for Bitcoin market analysis, shows long-term holders (LTHs) tend to drive market trends while STHs react. LTHs, having unrealized profits, come under selling pressure during market peaks, potentially contributing to price corrections. Currently, Bitcoin is hovering near its all-time high, suggesting potential for further growth.

Macro trends also indicate bullish sentiment for Bitcoin, predicting a potential surge beyond $200,000. An anticipated increase in the Treasury market and concerns about 'monetary debasement' are seen as key catalysts driving this surge.

While Bitcoin's current bull run is approximately 40% complete, the coordination between LTHs and STHs is seen as the primary influencer for future market developments.