According to Glassnode’s latest weekly newsletter, Bitcoin is facing a period of “sideways boredom” that could last up to 18 months. The analytics firm predicts that long-term Bitcoin holders may face an “arduous road” ahead as the bull market gains momentum. While some experts believe that Bitcoin will experience a dramatic uptick in the coming year, others suggest that it may take longer – perhaps until 2025 – for a new all-time high to be reached.
Glassnode explains that there are signs that a classic pre-bull market phase is playing out, but long-term holders will still need considerable patience. Investigating the “liveliness” of the BTC supply, which describes the propensity of Bitcoin holders to spend or hold their coins, researchers revealed mass accumulation. Currently, Liveliness is in a multi-year macro downtrend, having peaked in May 2021 when the bear market first set in. These HODLers are currently accumulating coins at a rate of around 42.2K BTC/month, suggesting that the price insensitive class are absorbing a non-trivial portion of the currently available supply.
Glassnode added that decreasing exchange balances also point to the supply becoming increasingly illiquid – out of reach in private cold storage and not for sale. The more speculative end of the hodler base – short-term holders – is also in focus as they have hodled coins for a maximum of 155 days, and their aggregate cost basis – around $26,400 – is on the radar as a short-timeframe support zone.
Overall, the market appears to be in a period of quiet accumulation, which suggests an undercurrent of demand, despite the regulatory headwinds of late. However, beneath the surface, the classic pattern of wealth transfer towards the price insensitive HODLer cohort remains uninterrupted. According to past cycles, this suggests that a period of apathetic sideways boredom may well define the road ahead, potentially lasting between 8 to 18 months in duration.
Glassnode believes that it will take another halving to come and go for a seismic trend shift to occur. Across most measures of market energy, digital asset markets are displaying excitement in few of them. Volatility, volumes, and realized value are all at multi-year lows as liquidity and excitement give way to investor apathy.
It is important to note that this article does not contain investment advice or recommendations, and readers should conduct their own research before making any decisions.