The most recent crypto statistics indicate that the process of the halving of Bitcoin is already 85% accomplished. The supply and inventory of these digital tokens as possessed by long-term holders (LTHs) is also approaching its record high alongside Bitcoin halving 85% complete. This signaled the approach of a macro bottom in past cycles, followed by the beginning of a new cycle.
Long-term holders’ BTC supply has, for a long time, traditionally served as a reliable indicator of the state of the market for digital currencies. This statistic has historically had an inverse correlation with the long-term price movement of the biggest cryptocurrency.
Halving progress till now!
Cryptocurrency expert @therationalroot tweeted a graph on X, showing the development of Bitcoin’s halving percentage up to Bitcoin halving 85% complete. The time intervals between the historical halves of the preceding three cycles are compared.
The current Bitcoin halving is already 85% finished, claims @therationalroot. Moreover, similar sideways BTC price behavior was a feature of the relatively brief 15% cycle-end intervals. In both cases—2016 and 2020—the cost of the biggest cryptocurrency stayed almost the same.
The distinction is that Bitcoin had an upward-biased sideways trend two cycles ago. The strenuous market crash brought on by the COVID-19 disaster provided investors with an additional chance in the preceding cycle. They could assume a desirable position just before the anticipated halving.
The Context of the Halving
Another graphic that @therationalroot released showed the supply of Bitcoin held by long-term investors. Additionally, he added a Bitcoin halving overlay to his diagram, displaying Bitcoin halving 85% complete. The first thing noticeable in his chart is that the BTC supply ratio held by LTHs is currently very close to its all-time high, which is at 76%.
When the BTC price concluded the phase of accumulation before the second halving at the end of 2015, this was decided. Afterwards, it could be observed that each time, the indicator peaked many months before the halving of Bitcoin (marked by green circles) took place. The supply held by LTHs then progressively decreased following this local high and went sideways until many months after the next halving.
The big decrease in this indicator and the onset of a mature bull market in cryptocurrencies occurred only after the passing of nearly six months after this incident.
The Market Intricacies
The long-term holders (HODL) are increasingly eager to sell their assets for a profit at the end of the bull market phase as a result of the rise in the price of BTC. Historically, we have seen a sharp decline in supply held by LTHs during each significant bull market. The coins therefore naturally end up in the hands of short-term investors (STHs), who enter the market late and are motivated by the need to make a rapid profit.
In contrast, the converse takes place when a bear market is beginning. LTHs of cryptocurrencies retain their assets in place when the market is at its lowest point. The biggest supply growth in LTH’s possession also happens during such ferocious bear markets. At this point, strong-handed investors hesitate to sell as the price of bitcoin falls. They keep their coins because they think the Bitcoin market will recover and their investment will be rewarding in the future.
A highly fascinating period is beginning for the Bitcoin market after the event of Bitcoin halving 85% complete. The anticipated mid-2024 bitcoin halving is an occasion that is catching investors’ attention more and more. But if history is any guide, a mature bull market won’t start until at least the next year.
In the greater scheme of things, the cryptocurrency market might experience an approximately one-year sideways trend if history were to be reiterated. The mid-April 2024 halving of Bitcoin may not have an immediate effect on the price of BTC. Its consequences may not be felt until the final quarter of 2024 and into 2025.