Bitcoin bull market over?

Bitcoin bull market over? Data from us provides answers

After Bitcoin (BTC) posted its worst daily loss in over a month, the cryptocurrency is now stabilising at US$54,000 – is the end of the bull market now in sight?

Bitcoin has experienced a strong correction. Within the last 24 hours, the price of the cryptocurrency fell by over 4.81 per cent.

At the time of writing, Bitcoin is hovering around the 54,000 US dollar mark. Many crypto newbies are now wondering if the Bitcoin rally is over, but a recent report by Crypto Trader review analysis firm Glassnode draws a different conclusion.

BTC wealth transfer from the big to the small

In The Week on Chain report on 22 March, Glassnode noted that there is currently a BTC redistribution from long-term investors to new investors. Since March 2018, Bitcoin addresses holding one BTC or less have increased their share of the total BTC supply to 5.2 percent. Three years ago, this group of investors held just 3.97 per cent of the total bitcoin supply.

This trend has now been going on since mid-2018 and has not slowed down even after the Corona crash in March 2020. At the same time, whale addresses, those holding more than 100 BTC, have only increased by 0.87 per cent in the last 12 months. Overall, however, these large investors still hold the lion’s share of the total bitcoin supply at 62.6 per cent.

“Bitcoin is in a later phase of the bull market”.

In addition, Glassnode uses what it calls the Reserve Risk Indicator to assess the confidence of long-term BTC investors relative to the price.

The chart shows the reserve risk oscillator. This is currently at a value of 0.008, with previous periods above this value highlighted in blue. In the past, bull cycles have ended when the value has been greater than 0.02. The chart also shows the reserve risk oscillator. Moreover, the chart illustrates that long-term investors gradually sell their coins as reserve risk increases – a transfer of wealth from long-term holders to new buyers.

The bull market is not over yet, according to Glassnode, as critical long-term sell signals have not occurred at the moment. Nevertheless, the company stresses that we are currently in a phase similar to the second phase or a later phase of past bull markets.

Ki Young Ju, CEO of the South Korean analytics firm CryptoQuant, thinks it is unlikely that Bitcoin will see a quick recovery.