Bitcoin experienced a rocky start to the weekend, dipping below the $115,000 mark for the first time since early July. This price level was viewed by many as a crucial benchmark, leading to speculation about the future trajectory of Bitcoin’s value. However, recent analysis of blockchain data hints that the ongoing Bitcoin surge might have further to run.
Long-Term Bitcoin Investors Begin Selling Off
Crypto analyst Joao Wedson shared insights on X (formerly Twitter) on August 1st, suggesting that long-term holders of Bitcoin may be nearing the end of their investment cycle.
Wedson emphasized that, even with the current enthusiasm surrounding exchange-traded funds (ETFs), blockchain analysis reveals a distinct shift in market dynamics. This change suggests that long-term investors are starting to offload their Bitcoin holdings, and in substantial quantities.
According to Wedson, long-term holders have sold approximately 50% of the Bitcoin held within exchange-traded funds. Despite this trend, Wedson anticipates the Bitcoin bull market will persist for “at least 2 more months,” with the altcoin bull cycle potentially extending for three months.
Warning Signals Emerge, But ‘Ultimate Peak’ Remains Unseen
Wedson supported his forecast using four blockchain-based indicators, starting with the Coin Days Destroyed Terminal Adjusted Metric, which tracks the movement of Bitcoin that has remained untouched for an extended duration.
Wedson clarified that a considerable amount of previously dormant Bitcoin has been transacted in the last couple of years. According to Wedson, this activity has triggered three significant warning signals that often coincide with a local peak in the price.
Wedson also highlighted the Reserve Risk Indicators, used to assess the confidence of long-term holders. The analysis shows this metric has entered a cautionary zone, indicating increased selling pressure and transfer of ownership.
The analyst further referenced the Spent Output Profit Ratio (SOPR) Trend Signal, which measures whether Bitcoin is being moved at a profit or a loss. Wedson noted that this indicator recently displayed a bearish signal, suggesting heightened profit-taking activity in the market.
Lastly, Wedson presented the Bitcoin Cycle Market Top Prediction: Max Intersect SMA Model, calling it “the most accurate metric” for identifying Bitcoin’s overall peaks. He emphasized that this metric has yet to trigger a bearish signal. Using the accompanying chart, Wedson explained that the ultimate peak is unlikely until the blue line reaches the $69,000 level.
In conclusion, Wedson advises against hasty reactions, pointing to historical patterns that suggest the market’s final peak is still on the horizon. As of this report, Bitcoin is trading around $113,052, reflecting a 1.2% decrease in value over the last 24 hours.