- Bitcoin realized that the cap age limits showed that holders started selling.
- This doesn't have to be a reason to panic, it's actually a reason to celebrate.
Bitcoin [BTC] has staged a wild rally over the past five days, rising from $50.9k to $64k. AMBCrypto found that long-term BTC holders were not yet selling their assets but preferred to HODL.
This was similar to previous crypto cycles. Furthermore, the evidence strongly suggests that the bull market has only just begun.
Exploring the realized Cap-UTXO age bands
Source: CryptoQuant
This metric shows the distribution of the realized upper limit of a given age group. The realized cap is the total value of BTC in circulation if purchased at the price each coin last moved at. Each colored band represents the ratio of the realized cap of UTXOs most recently moved in the specified time period.
The graphic summarizes the capitalization of short and long term holders. In the second half of the 2017 bull market, there was a downward trend across all age groups from 3 months to 5 years.
A similar downward trend was also seen in 2021. The reason for this is simple: the higher prices go, the more holders take profits. Although it is not possible to tell when the bull market would end using this metric, it is relatively easy to identify when it began.
The rapid pace at which the 3- to 6-month holder and 6- to 12-month holder age groups have declined since mid-January is similar to the bull runs of 2017 and 2021.
There is still a long way to go
Source: CryptoQuant
The number of active addresses almost reached its 2021 peak in November. However, the chart above shows the 30-day simple moving average. Since then, the SMA has been trending downward even as prices have skyrocketed.
In the past, active addresses increased in parallel with prices. Of course, Bitcoin would attract more users as its popularity increases with price. This was another sign that the longer-term bullish trend was just beginning.
Source: CryptoQuant
The MVRV ratio reached 2.59, a value not seen since November 2021. The value of 3.7 would indicate that the run is probably over. From today's perspective, there is enough space and time for the MVRV to climb higher.
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Any setbacks and significant corrections along the way are to be welcomed. They likely represent discounts on Bitcoin. In 2019, prices reached $12,000, but the MVRV was no higher than 2.6.
While a black swan event like the coronavirus may not repeat itself, the conclusion remains the same: there is still a long way to go for Bitcoin price discovery at this stage.
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