The cryptocurrency market is entering an intriguing phase with the upcoming Bitcoin halving expected in mid-2024. Investors are increasingly interested in this event, but historical data suggests that a mature bull market may not begin until next year at the earliest. Key indicators, such as the supply held by long-term holders (LTHs), are signaling important trends in the market.
Supply Held by Long-Term Holders (LTHs):
The supply of Bitcoin held by long-term holders is a crucial metric that historically correlates with the cryptocurrency market’s health. During bear markets and price declines, LTHs tend to hold onto their assets, contributing to an increase in their supply ratio. This indicates strong-handed investors who believe in the long-term potential of Bitcoin.
Conversely, in bull markets, LTHs become more willing to sell their assets at a profit, and the supply shifts to short-term holders (STHs) looking for quick gains. Each major bull market cycle has witnessed a significant drop in the supply held by LTHs.
Bitcoin Halving Progress:
An analyst (@therationalroot) has charted the progress of the current Bitcoin halving compared to previous cycles. The data suggests that the current halving is already 85% complete, and the remaining 15% corresponds to periods where Bitcoin’s price action remains relatively sideways.
Predicting the Next Bull Run:
Historical data shows that Bitcoin’s supply held by LTHs reaches its peak several months before a halving event. Afterward, it gradually declines and moves sideways until several months after the next halving. A strong decline in this metric typically occurs about six months after the halving, signaling the start of a mature bull market.
If history repeats itself, the cryptocurrency market may undergo a roughly one-year sideways trend. The effects of the Bitcoin halving in mid-April 2024 may not immediately impact BTC’s price, becoming more apparent in late 2024 and throughout 2025.
This prediction aligns with the trends observed in the supply held by long-term holders, which is currently approaching an all-time high (ATH). It may take approximately 12 months for this indicator to reverse its trend and enter a distribution phase when LTHs begin selling after the halving event, signaling the start of a new cryptocurrency bull run.