Glassnode crypto analytics firm spotted several indicators that suggest the bitcoin bulls might be slowing down. The current on-chain indicators suggest that the bull market might be entering into its later stages.
The analytics provider noted in its March 22 Week on Chain report that there is a drop in the number of bitcoin whales despite the constant buying from the wallets that hold 1 BTC or less since March 2018. This report highlighted:
“The persistent accumulation of smallholders demonstrates a willingness to HODL through volatility with the trend unbroken from mid-2018 through the chaos of 2021.”
Whale addresses that hold more than 100 BTC have been somewhat flat by comparison, with the group currently holding about 62.6% of the supply. That represents an increase of around 0.87% in the last 12 months.
Riding on its “Reserve Risk” metric used to assess the confidence of long-term holders subject to the bitcoin price, Glassnode said that a BTC “wealth transfer” from long-term holders to the new retail buyers is currently ongoing.
The report also said that the bull markets generally follow the same wealth transfer path in three unique phases that can be used to estimate what stage the current cycle is in. In the peak hodl phases, there are inflection points where the biggest proportion of long-term holder, or LTH, owned coins are still in the profit zone.
“Similar to the Reserve Risk metric, these studies suggest conditions are similar to the second half or later stages of a bull market. There remains a larger relative portion of supply still held by LTHs having only spent 9% since the assumed Peak HODL point.”
Glassnode joined Chinese mining pool BTC.TOP CEO Jiang Zhuoer to speculate that the bull market could come to an end as soon as September this year.
While speaking to local media on March 21, Jiang cited a general economic recovery amid the COVID-19 vaccine rollouts around the world. He also said that the possible withering interest in crypto assets by huge corporations like Tesla and MicroStrategy adding BTC to their treasury reserves fail to continue. These factors may act as catalysts for a major market reversal.
Investment manager Timothy Peterson also commented on the recent decline in whales, saying:
“such moves are often but not always associated with bear markets.”
Peterson said that bitcoin’s price may plunge to as low as $25,000 in the next bear market.