Bitcoin’s ‘True Top’ May Already Be In: Nadeau Warns of Déjà Vu From 2021 Cycle
Bitcoin long-term holders (LTHs) at the moment are distributing BTC again into the marketplace for the third time within the present cycle.
Their present habits may outline the trajectory of the continuing cycle.
Repeat 2021-Style Cycle Top?
In the 2021 cycle, long-term holders started their important distribution section between November 2020 and March 2021. In the method, this cohort of BTC holders trimmed their provide by 13.5% simply earlier than Bitcoin’s April 2021 peak, which Michael Nadeau, founder of The DeFi Report, argues was the “true” cycle prime.
These cash had been transferred to short-term holders (STHs) and launched new liquidity into the market. However, LTHs quickly re-accumulated, ending the 12 months with bigger positions than they started with, which explains why the second prime in November 2021 was comparatively muted because it lacked the inflow of new capital and was largely fueled by repositioning of current holdings.
Interestingly, the identical construction is unfolding within the current cycle based on the most recent findings by Nadeau. LTHs diminished their provide by 12.4% into what might have been the primary “true” prime earlier this 12 months (within the first quarter Q1 2025). Since then, the re-accumulation pattern has returned, which is kind of much like the post-April 2021 section.
Despite this, not like in earlier cycles, the participation from short-term holders (STH) stays low, and there was minimal proof of new cash getting into the market. Nadeau mentioned that this muted demand may cap the power of future rallies, echoing the two-top construction of 2021, the place LTH habits and time-driven holder transitions, quite than broad inflows, formed late-cycle worth motion.
BTC Market Remains Vulnerable
Glassnode’s information additionally pointed in the identical route. The analytics platform discovered that regardless of modest indicators of restoration, fragility lingers beneath the floor, which has left Bitcoin susceptible if recent demand fails to make a comeback.
While the spot market momentum is powerful sufficient to push RSI into overbought territory, conviction appears to be like shallow, owing to flat volumes and weakening CVD, suggesting sellers proceed urgent into power.
Futures markets mirrored high exercise, as evidenced by open curiosity and aggressive buy-side flows driving perpetual CVD increased, although softer funding highlighted diminished lengthy demand and a extra cautious outlook.
Options markets advised an analogous story: open curiosity climbed, however volatility spreads narrowed and skew dropped sharply, which implies much less hedging and better complacency, thereby rising the chance of sharp reactions if volatility resurfaces.
On-chain alerts had been combined. BTC addresses trended towards cycle lows whereas switch volumes rose, pointing to capital inflows with out broader person development. Fees declined, reflecting weak block area demand and muted speculative stress. With profitability metrics enhancing, buyers are broadly in revenue, however rising profit-taking hints at potential demand exhaustion.
The submit Bitcoin’s ‘True Top’ May Already Be In: Nadeau Warns of Déjà Vu From 2021 Cycle appeared first on CryptoPotato.