Now to look at 2 measurements on the chain

After the long-term bear market ended at the end of 2022, the price of Bitcoin rose by 155% in 2023. After reaching a macro bottom in the $15,500 area, the largest cryptocurrency began a period of consolidation and a slow rise, typical of an early bull market.

However, by early 2024, Bitcoin will reach around $57,000. Therefore, the first on-chain indicators are appearing that indicate the beginning of a ripe bull market in the cryptocurrency sector. This period of the fastest BTC price increases, historically started about 6 months after the halving.

In this cycle, will Bitcoin's parabolic rise and new all-time high (ATH) already occur halfway? Or is a deep correction expected soon? Let's find out!

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2 On-chain indicators: Short-term holders buy BTC

Cap HODL Waves are the first on-chain indicator to signal the onset of a mature bull market. This indicator weighs the actual value of the HODL Waves indicator. HODL Waves, on the other hand, is a set of all active supply age bands or HODL waves. Each colored bar shows the percentage of existing Bitcoins that have moved in the most recently selected period.

In other words, the realized Cap HODL Waves indicate changes in the distribution of Bitcoin according to the holding period and the behavior of the owners. Generally, short-term HODL waves (red and orange, less than 6 months) occur during bear markets. Conversely, during a bull market, long-term waves (green and blue, over 6 months) decrease in volume as holders sell their long-held coins.

At the top of the cycle, this leads to short-term HODL waves (red areas) in most coins. Such a situation leads to a rapid breakout and precedes a long-term bear market.

On the other hand, once the decline is over, the red and orange HODL waves remain flat for a long time and have a small market share. The maturity stage of the next bull markets is only at the beginning. This table shows a significant increase in size (green areas).

If this interpretation is correct, the Bitcoin market has just entered a mature bull market phase. This led to a new all-time high (ATH) in history. But often to prices from previous highs.

Long term owners (LTH) started selling

Another interpretive indicator is Hodler's net position change, which indicates the same key period in the BTC market. The indicator shows the monthly position change of long-term investors (HODlers, LTHs). Therefore, LTHs are indicated when they reduce their position (red) and when they accumulate new net positions (green).

Historically, periods of the largest shortfalls are associated with market tops (red areas). However, the decline in BTC stock is also seen at the bottom of a bear market. This is related to the attraction of long-term hodars at the end of the cycle.

However, the onset of increased LTH selling activity usually indicates the beginning of a mature phase of a bull market (blue areas). After these initial signs of BTC transfer to short-term holders, the main phase of the historical bull market (blue arrow) began.

If the situation repeats itself this time, these 2 indicators on the chain clearly indicate the level of the Bitcoin cycle. However, despite the similarities, each cryptocurrency market cycle has its own unique characteristics that escape historical patterns.

In addition, the cryptocurrency market is still characterized by high volatility that allows regular corrections between 20-30%. However, in a mature bull market, such dips are excellent buying opportunities and implement “buy the dip” strategies.

Click here for BeInCrypto's latest crypto market analysis.