The price of Bitcoin (BTC) has fallen 2.25% over the past 24 hours and is currently 16% below its all-time high of $73,835 hit on March 14.
Bitcoin prices have fallen 8.75% over the past 30 days and 5.5% over the past three months. BTC prices have slumped in June, leading market analysts to question whether a “cycle apex” has arrived for the pioneering cryptocurrency.
Let’s take a look at some of the reasons why some analysts believe Bitcoin’s bull market has peaked.
Inflation Rate for Long-Term Bitcoin Holders is Nearing a Critical Threshold
Charles Edwards, founder of Capriole Investments, said multiple on-chain indicators suggest that Bitcoin’s failure to reach new highs after two retests is a “sign of weakness.”
Edwards said in his latest newsletter. explanation Bitcoin long term holder (LTH) inflation has been steadily increasing over the past two years.
According to Glassnode, the LTH market inflation rate measures the annual rate of accumulation or distribution over the daily issuance to miners. Higher values indicate that LTH is experiencing increasing sell-side pressure as its Bitcoin holdings dwindle.
At the peak of a bull market, market inflation exceeds nominal inflation (a threshold of 2.0), “which typically signals a likely business cycle peak,” Edwards says.
“1.9 today is way too close to that level for me.”
Bitcoin dormant flows increase for third consecutive month
Another indicator that helps determine market cycles and assess whether Bitcoin is bullish or bearish is dormant flow, an on-chain metric used to measure the number of coins being spent compared to the overall trend.
Additional data from Glassnode shows that Bitcoin’s Dormancy Z-Score has increased sharply over the past 90 days.
Edwards noted that the metric peaked significantly in April, suggesting that the average age of a coin will be significantly higher in 2024. “Peaks in this metric (the Z-score) typically occur just three months into the cycle,” the analyst explained.
“Now, three months later, prices have just come down and the dormant Z-score peak is still following a very similar structure to the 2017 and 2021 peaks.”
At its current value, the Dormant Flow Z-Score means that Bitcoin is overvalued relative to the total coin in transactions not backed by trading volume. This suggests that Bitcoin price may have reached a cycle high, which could be bearish for the cryptocurrency market as a whole.
Related: How long will Bitcoin price consolidation last?
Spike in spending could signal a new all-time high for Bitcoin
Finally, clusters and spikes of increased spending can help signal what Edwards calls “areas of growing risk.” Historically, when Bitcoin sees a sudden surge in spending over a 7-10 year period, this can be a signal of a cycle.
Also note that the increase in spending in 2024 suggests that the cycle is moving forward quickly.
“This chart will surprise you and slap you in the face,” Edwards said. Said In a post by X on July 2nd.
“The entire history of this chart has disappeared due to a massive amount of Bitcoin moving on-chain – 10 times the previous all-time high.”
Edwards also noted that over $9 billion in Bitcoin was moved by addresses that are more than 10 years old, which he attributes to recent moves by the shuttered crypto exchange Mt. Gox in late July as it prepared to repay creditors.
Bitcoin financial services company Swann echoed similar sentiments. To tell The market is concerned about the impact of the 142,000 bitcoins (worth about $9 billion at current rates) that Mt. Gox creditors will soon release after 10 years.
“While many creditors are long-term holders with payment options, institutional holdings and tax considerations mean selling pressure will be gradual rather than sudden, even if all the coins hit the market at once,” Swan explained.
In a follow-up X post, the company Added If government sales continue, this will increase supply-side pressure on Bitcoin.
Previous reports by Cointelegraph revealed that a cryptocurrency wallet claiming to be “German Government (BKA)” transferred 832.7 Bitcoin (roughly 52 million) in four separate transactions on July 2. According to data from Arkham Intelligence, the wallet sent 100 BTC to Coinbase, 150 BTC to Bitstamp, and 32.74 BTC to Kraken.
Tracking Bitcoin whale selling patterns can provide investors with valuable clues about Bitcoin prices, as large volumes of sell orders can signal market peaks.
This article does not contain any investment advice or recommendations. Any investment or trading involves risks and readers should conduct their own research when making any decision.
