- Bitcoin is facing its longest post-halving delay to a new all-time high.
- Halving cycle thesis may no longer hold due to significant shifts in market dynamics and supply overhang.
- Short-term holders could trigger a sell-off if prices decline further amid mixed signals from on-chain metrics.
Bitcoin (BTC) is facing its longest post-halving delay to a new all-time high as it trades around $58K on Wednesday. Unlike previous times, several supply overhangs in the past months and strong interest rates environment have heavily weighed on Bitcoin's price.
Halving cycle thesis faces questions
The post-halving delay to a new all-time high has caused a significant shift in Bitcoin market dynamics, which heavily relied on halving as a major bullish multiplier. Some of these changes were anticipated due to the introduction of new market players and investor classes following the launch of spot Bitcoin ETFs.
The move also saw Bitcoin making a parabolic run to an all-time high for the first time pre-halving. As a result, investors displayed a somewhat opposite behavior from previous halving seasons.
Historically, halving seasons are usually periods of accumulation where investors prepare for potential upsides. However, Glassnode data shows an increase in realized profits during the halving season from March to April. Following Bitcoin's all-time high of $73K in March, long-term holders (LTHs) booked profits significantly and have now slowed down their efforts.
BTC Realized Profits 7D-MA
Furthermore, the current post-halving season witnessed some of the largest supply overhangs, including the repayment of creditors of defunct exchange Mt.Gox and the German government's sale of seized BTC funds.
Bitcoin's on-chain metrics indicate mixed signals
As a result, Bitcoin's price has been facing bearish pressure that has seen its price struggle under the $60K mark. Despite the declining prices, BTC's unrealized losses are still at 2.9% of its market capitalization, per Glassnode data. Furthermore, the combined ratio of Unrealized Profit and Unrealized Loss is at 6.19, indicating that profits are 6x larger than losses for the aggregate investor.
However, zooming in shows that short-term holders (STH), typically investors whose coins are less than 155 days old, carry most of the unrealized losses. "However, even for this cohort, the magnitude of their Unrealized Losses relative to the market cap is not yet in full-scale bear market territory and more closely resembles the choppy 2019 period," noted Glassnode analysts.
Bitcoin STH Relative Realized Losses
If Bitcoin's price weakens further, it could be at risk of a heavy sell-off from these cohorts, who are historically sensitive to price declines. Glassnode analysts note that Bitcoin needs to rise above the $62.5K price level to shift coins within this cohort to profitability again.
Meanwhile, several Bitcoin tokens purchased during the all-time high in March are maturing into the long-term holders cohort, which is typical during a move toward a bear market. However, Glassnode analysts noted that "the percentage of wealth held by new investors did not reach the elevated limits experienced during previous ATH distribution events."
"This may indicate that the 2024 peak is more aligned with the 2019 mid-cycle high rather than the macro highs seen in 2017 and 2021," they added.
As a result, it's still unclear whether Bitcoin has topped for the cycle or will stage another rally to a new all-time high.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
![Bitcoin halving has failed to impact price, on-chain metrics highlight mixed signals](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_forex_XtraSmall.jpg)
Bitcoin halving has failed to impact price, on-chain metrics highlight mixed signals
Bitcoin (BTC) is facing its longest post-halving delay to a new all-time high as it trades around $58K on Wednesday. Unlike previous times, several supply overhangs in the past months and strong interest rates environment have heavily weighed on Bitcoin's price.
![Crypto exchange trading volume sees growth amid market decline](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptocurrenciesusd_XtraSmall.jpg)
Crypto exchange trading volume sees growth amid market decline
CCData released its monthly report on Wednesday, revealing that centralized exchanges witnessed significant surges in spot and derivatives trading volumes. Meanwhile, the CME experienced a decline in derivatives trading volumes, particularly in its ETH options and futures volume.
![Ethereum underperforms Nvidia, Bitcoin, Meta, others on risk-adjusted returns amid declining investor interest](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Ethereum/Ethereum_Coins_31_03_XtraSmall.jpg)
Ethereum underperforms Nvidia, Bitcoin, Meta, others on risk-adjusted returns amid declining investor interest
Ethereum (ETH) is up 0.1% on Wednesday following increased outflows and declining trading volume across ETH products. This follows key data showing ETH's recent underperformance compared to other top assets.
![Uniswap Labs fined by CFTC following allegations of offering illegal crypto derivative services](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Uniswap/uniswap-150x150logo-637399982744667692_XtraSmall.png)
Uniswap Labs fined by CFTC following allegations of offering illegal crypto derivative services
Uniswap Labs (UNI) received a $175,000 fine from the Commodity and Futures Trading Commission (CFTC) on Wednesday after the regulator issued a filing and settling charge against the decentralized exchange.
![Bitcoin: Will BTC continue its ongoing decline?](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_5_XtraSmall.jpg)
Bitcoin: Will BTC continue its ongoing decline?
Bitcoin (BTC) trades above $59,000 on Friday, but it has lost 7.5% this week so far after being rejected around the daily resistance of $65,000. The decline is supported by lower demand from the US spot Bitcoin ETFs, which registered a net outflow of $103.8 million, falling Bitcoin's Coinbase Premium Index, and a spike in Network Realized Profit/Loss.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.