Bitcoin Copies Spending History As Metric Flags ‘Phase 1 Bull Market’

Latest analysis confirms long-term holders of Bitcoin (BTC) are coming back to life as BTC price rises.

one in do On July 13, Philip Swift, creator of on-chain data resource Look Into Bitcoin, revealed classic bull market behavior among “old” BTC investors.

Value Days Destroyed Many Print BTC Price Bull Signals

Bitcoin’s current price cycle may split opinion when it comes to how high BTC can go, but one thing is certain: hodlers behave the same.

As BTC/USD more than doubles in 2023, on-chain spending velocity has increased, indicating profit-taking activity.

Uploading a chart of the Value Days Destroyed (VDD) multiple, Swift suggested that the current cycle is barely different from all previous cycles in this regard.

Part of the Twitter commentary said, “The increase in onchain spending volume shows where we are in the cycle right now.”

“History does not repeat but often rhymes.”

VDD is based on the existing Coin Days Destroyed (CDD) metric, which measures the amount of inactivity each time the amount of BTC on-chain increases. It takes CDD data and takes into account the current BTC price, and its multiplier compares the 30-day result to the 365-day average.

“It is able to highlight when older coins begin to enter the market to sell off faster,” Swift explains in an instructional guide on Look Into Bitcoin.

“This typically occurs when long-term participants seek to book profits when prices move higher in major bullish market cycles.”

The VDD multiple currently measures 1.32, slightly behind the 2023 peak of 1.37 seen in April. For Swift, this is a clear sign of a “phase one bull market”.

feedbackCheckmate, principal on-chain analyst at data firm Glassnode, called the findings “remarkable.”

“It is remarkable how consistent the cycles are. Human beings respond in the same way to the same stimuli,” he replied.

“This time is really no different.”

not just bitcoin diamond hands

Meanwhile glassnode data underlines How attractive it can be for various hodler classes to cash out at current prices.

Related: Bitcoin Bulls ‘Have to Work’ After XRP Price Surges 104%

Bitcoin’s market value to realized value (MVRV) ratio for long- and short-term holders (LTH and STH, respectively) shows both types of investors are significantly at risk.

LTH coins – defined as coins that have been inactive for at least 155 days – overall are worth 1.52x more than they were last taken. For the STH equivalent, the number is 1.12.

Earlier, Cointelegraph reported on the increasing influence of STH on BTC price action.

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This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.