According to the latest research by on-chain analyst CryptoChan, Bitcoin’s “LTH/STH Cost Ratio” recently dropped to 0.282. This key indicator has accurately predicted the starting point of a bull market several times in history.
On May 6, 2017, the index fell to 0.282, followed by the peak of the bull market of Bitcoin's rapid rise from around $1,500 to $20,000.
On December 24, 2020, the index fell again to 0.281, after which Bitcoin broke its previous high and climbed to a new record of nearly $69,000 in 2021.
Now, the index has dropped back to 0.282 for the third time, roughly coinciding with the previous bull market’s launch range. As can be seen from the chart:
The black line above represents the Bitcoin price trend. The current price has been steadily rebounding, showing a gradual upward trend in the previous bull market.
The blue curve below represents the LTH/STH cost ratio. With this ratio at a historical low, it indicates that short-term holders’ chips are close to the cost price of long-term holders. The market structure and chips tend to be typical of a bull market.
Currently, the Bitcoin price trend is very consistent with the historical cycle of index volatility, which reinforces the market's bullish outlook. Combined with on-chain data and money flow analysis, a new round of bull market may be on the way.
Future observation point:
Can Bitcoin continue its upward trend and break through important resistance levels?
Whether the distribution of funds and chips maintains a healthy pattern will help push market sentiment towards an overall bullish trend.
Will history repeat itself? Has the bull market already started? The next trend will be the focus of the market!
