Bitcoin’s price stumbled as the weekend began, dipping below $115,000 for the first time since early July. This break below a previously significant price point has sparked debate about how much further Bitcoin can climb. However, recent on-chain analysis hints that the current Bitcoin surge may still have legs.
Long-Term Bitcoin Holders Initiate Sales
On August 1st, crypto analyst Joao Wedson shared on X that long-term holder behavior suggests a potential shift in the Bitcoin cycle.
Wedson emphasized that, even with the excitement surrounding ETFs, on-chain data reveals a change in market dynamics. This change indicates that long-term Bitcoin holders are starting to offload their holdings, and doing so in considerable quantities.
The analyst estimates that long-term holders have sold approximately 50% of the Bitcoin held in exchange-traded funds. Despite this, Wedson anticipates the Bitcoin bull market to continue for “at least 2 more months” and expects the altcoin surge to last for three months.
Warning Signals Appear, But the ‘Ultimate Peak’ Is Still Ahead
Wedson supported his analysis with four on-chain indicators, beginning with the Coin Days Destroyed Terminal Adjusted Metric, which tracks the movement of older coins that have remained untouched for a long duration.
The analyst explained that a notable volume of older Bitcoins has been moved within the last two years. Wedson highlighted that this has triggered three key warning signs that have historically aligned with local market tops.
Wedson also pointed to the Reserve Risk Indicators to assess the conviction of long-term holders. According to his analysis, this metric has entered a cautionary zone, reflecting increased selling pressure and a transfer of ownership.
Wedson further cited findings from the Spent Output Profit Ratio (SOPR) Trend Signal. The SOPR determines whether Bitcoins are being moved at a profit or loss. Wedson noted that this indicator recently signaled a bearish trend, suggesting increased profit-taking within the market.
Referring to it as ‘the most reliable indicator’ for identifying Bitcoin’s significant peaks, the Bitcoin Cycle Market Top Prediction: Max Intersect SMA Model was the final indicator discussed. Wedson emphasized that this metric has not yet shown any bearish signals. Referencing the chart provided, the analyst explained that the final top won’t be reached until the blue line hits the $69,000 mark.
In conclusion, the analyst advised against panic selling, as historical cycle patterns suggest that the ultimate market peak is still to come. As of this writing, Bitcoin is trading around $113,052, indicating a 1.2% decrease in price over the last 24 hours.