- Bitcoin realized that the age limits showed that holders started to sell.
- This doesn’t have to be a reason to panic; rather, it is a reason to celebrate.
Bitcoin [BTC] has started a wild rally over the past five days, 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. Moreover, evidence strongly suggested that the bull run had only just begun.
Research into the realized Cap-UTXO age groups
This measure shows the distribution of the maximum achieved for a certain age category. The realized limit is the total value of BTC in circulation if purchased at the price at which each coin last moved. Each colored band represents the ratio of realized limit of UTXOs last moved in the indicated period.
The chart provides an overview of the capitalization of short- and long-term holders. In the second half of the 2017 bull run, the age categories of everyone from 3 months to 5 years went down.
Likewise, 2021 also saw a similar downward trend. The rationale is simple: more owners take profits as prices rise. While it is not possible to pinpoint when the bull run might end based on this metric, it is relatively easy to spot its beginning.
The rapid pace at which the 3-6 month holding age ranges and 6-12 month holding age ranges have declined since mid-January is comparable to the bull runs of 2017 and 2021.
There is still a long way to go
The number of active addresses nearly reached its 2021 high in November. However, the chart above shows the 30-day simple moving average. The SMA has been on a downward trend since then, even as prices skyrocketed.
In the past, active addresses rose along with prices. Naturally, Bitcoin would attract more users as its popularity grew with the price. This was yet another sign that the higher time horizon uptrend was just beginning.
The MVRV ratio reached 2.59, a value not seen since November 2021. The 3.7 level would indicate that the run was likely over. As things stand now, there is plenty of room and time for the MVRV to climb the ranks.
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All retracements and significant corrections along the way are welcome. They likely represent discounts on Bitcoin. In 2019, prices reached $12,000, but the MVRV did not exceed 2.6.
While such a black swan event as the coronavirus may not repeat itself, the conclusion remains the same: there is still a long way to go for Bitcoin price discovery during this period.