The CEO and founder of on-chain analytics firm CryptoQuant has explained how this Bitcoin bull cycle could likely last until mid-2025.
Profit-taking by former Bitcoin whales lasted 18 months in previous cycles
In a new publish On X, CryptoQuant founder and CEO Ki Young Ju discussed a pattern that old whales followed in terms of profit-taking during previous cycles.
“Old whales take profits during bull markets,” Young Ju notes. “Their selling brings new capital to accumulation addresses, increasing realized prices.” Accumulation addresses refer to Bitcoin wallets that have no sales history.
These addresses also have a few other conditions, such as they must have at least two deposits and must not be connected to centralized miners or exchanges. They must also have a balance of at least 10 BTC and their last transaction must have occurred within the last seven years.
Accumulation Addresses basically reflect the market’s perennial HODLers, who only buy more and never sell. During bull markets, as old whales break their silence to take their profits, the demand from these HODLers absorbs the selling.
To demonstrate this trend, CryptoQuant CEO made use of the “Realized Price”Metric, which tracks the cost base of the average investor belonging to this group.
When the value of this indicator is above the spot price of the cryptocurrency, it means that the cohort as a whole is in a state of unrealized loss at the moment. On the other hand, being below the value of BTC implies that these diamonds are currently realizing profits.
Now, here is a chart showing the trend of realized price for Bitcoin accumulation addresses over the past decade:
As shown in the chart above, the realized price for this cohort has seen an increase over the last two Bitcoins. bullfights. This would suggest that these HODLers were buying as prices rose, thereby increasing their average cost basis.
This accumulation likely corresponded to profit-taking by other entities in the market. As Young Ju pointed out, this wave of profit-taking lasted for about 18 months in these previous cycles.
From the chart, it is visible that the indicator has once again started to show an upward trend as prices have risen this year. This would suggest that Accumulation Addresses have once again absorbed profit-taking from old whales.
So far, this surge has lasted about four months, which means there could still be about fourteen more months left if the last two cycles are anything to go by. Based on this, the analyst believes that this latest Bitcoin bull cycle could end by mid-2025.
BTC Price
Bitcoin has come close to the $70,000 level over the past day after seeing a surge of around 3%.