Is Bitcoin Bull Cycle Coming To An End? This Pattern Could Say So

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An analyst has noted a developing trend in a Bitcoin predictor, suggesting that the conclusion of the ongoing bull market might be near at hand.

Realized Cap Of New Bitcoin Investors Could Hint At End Of Cycle

A recent post on CryptoQuant discussed how past patterns of new investment flowing into the Bitcoin market could indicate potential outcomes for the ongoing cycle.

As a data analyst, I find the “Realized Capitalization” to be a significant metric for my analysis. This indicator estimates the total worth of the cryptocurrency by considering that every coin in its circulation possesses a value equivalent to the price at which it was last traded within the blockchain network.

In simpler terms, whenever a coin is transacted, it’s usually the point when it changes ownership. The price at that transaction time can be seen as its current cost basis. By adding up these cost bases for all coins in circulation, we get the Realized Capitalization, which gives us an idea of the total investment made by investors into Bitcoin.

The fluctuations in the indicator reflect the level of capital moving in or out of the market. A useful method to comprehend this is by examining the trajectory of the Realized Capitalization within the age brackets of newer coins.

Here’s a chart provided by the analyst showing how the proportion of the entire Bitcoin Realized Capital owned by the three most recent age groups has evolved throughout Bitcoin’s history:

This chart, shared by our quantitative analyst, demonstrates the shifting share of the total Bitcoin Realized Value controlled by the youngest three age cohorts across Bitcoin’s lifespan.

Looking at the graph, it appears that the portion of Bitcoin’s Realized Cap belonging to the 0 days to 1 day, 1 day to 1 week, and 1 week to 1 month age groups has experienced a significant increase lately. This suggests that a substantial number of coins were bought by investors over the past month.

As an analyst, I’ve observed a pattern suggesting higher capital influxes towards the cryptocurrency sector. Notably, my analysis reveals that past peak inflows often align with price peaks in Bitcoin (BTC). In previous market cycles, this trend was more pronounced when the Realized Capital of certain age bands accounted for a larger proportion of the total market compared to its current state.

While it’s true that this current Bitcoin price surge might continue, it doesn’t guarantee safety. In fact, history shows us that the peak values in the long-term trend have consistently decreased, suggesting each new high may be lower than the previous one.

Based on the current trend’s extrapolation for this cycle, it seems that the cryptocurrency might not have a lot of remaining growth potential. However, when the main influxes occur is still uncertain. Historically, there were often several peaks before the one that concluded the cycle.

BTC Price

Currently, as I’m typing this, Bitcoin is hovering slightly above $99,100, marking a rise of over 6% in the past week.

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2025-01-07 04:57