Cross-chain data shows that the portion of the realized Bitcoin cap held by its long-term owners has increased and is now close to 80%.
Long-term holders of Bitcoin hold nearly 80% of the realized capital
As explained by an analyst at CryptoQuant MailHistorically, crypto has tended to form lows around when the long-term owner’s share of the maximum achieved has exceeded 80%.
The “long term owners“(LTHs) are all Bitcoin investors who have been holding their coins without selling or moving for at least 155 days.
Max achieved is a method of evaluating the capitalization of a cryptocurrency where the value of each traded currency is taken as the price that was last moved or sold, rather than the current BTC price.
Now, the relevant indicator on the chain here is “Maximum Realized – UTXO Age Ranges (%)”, which tells us what part of the total maximum realized coin is in the bitcoin market.
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Different age groups indicate the amount of time investors belonging to a group spend holding their coins.
As mentioned earlier, LTHs include all cohorts joined at least 155 days ago. Below is a graph showing how the maximum contribution realized by these investors has changed over the course of Bitcoin’s history:
Looks like the value of the metric has observed rise recently | Source: CryptoQuant
In the chart above, the quantity has identified all relevant trend points related to Bitcoin’s maximum realized ratio of LTHs.
It seems that whenever the value of the indicator crosses the 80% mark, a bottom occurs in the price of the cryptocurrency.
Currently, the value of the metric has gone up in recent weeks, however, it hasn’t crossed the bottom line yet.
However, the indicator is almost there. If its value continues to rise and the historical pattern continues this time as well, you might notice Bitcoin lower thus.
At the time of writing this report, Bitcoin price It is floating around $21,000, down 30% in the past seven days. Over the past month, the cryptocurrency has lost 30% of its value.
The chart below shows the currency price trend over the past five days.
The value of the crypto seems to have been moving sideways over the last few days | Source: BTCUSD on TradingView
Since the crash a few days ago, Bitcoin has mostly been consolidating around the $21,000 mark. At the moment, it is unclear whether the decline is over or if more is to come.
If LTH’s share of the max achieved is anything to go by, BTC may first experience a slightly bigger drop before finally hitting the bottom.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com