Yesterday, Bitcoin (BTC) returned to $65,000, having fallen almost 9% since the beginning of April. Cryptocurrency traders and investors are wondering whether BTC has reached its price peak this cycle and what signals to pay attention to in the future. Predicting market tops and bottoms is a difficult task even for the most experienced traders. Be that as it may, everyone, without exception, should rely on historical indicators, patterns and signals. For example, the founder of Capriole Investments, Charles Edwards, identified 13 main Bitcoin signals that are worth following in this cycle. According to the expert, 4 of the 13 main Bitcoin signals are already in the high-risk zone.
The slowdown in the growth rate of Bitcoin holders is the main signal for concern. Firstly, the slowdown in the growth rate of the number of long-term holders of Bitcoin, also known as holders, may indicate that “diamond hands are beginning to take profits.” Historically, when the inactive supply of Bitcoin stops growing for two years or more, this can be a major signal of the end of the cycle. At the moment, this indicator has not reached new maximums for three months, while in previous cycles the maximum was reached in six to nine months. knowledge of this model.
The growth rate of the number of long-term BTC holders. Source: Glassnode (Capriole Investments)
Activity of “sleeping” bitcoins, or Dormans Flow Bo indicator Secondly, founder of Capriole Investments
noticed an increase in activity from previously inactive Bitcoin wallets, which, in his opinion, also causes concern.
It is quite alarming that the Dormanc Flow value is at its peak today, which suggests that in 2024 the average age of BTC spent will be significantly higher.
Standardized assessment of inactive Bitcoin wallets. Source: Glassnode (Capriole Investments)
Percentage of Bitcoin addresses in profits B-thirds, according to analyst estimates, more than 95% of Bitcoin addresses are now in the profitable zone, which is also an important signal. Essentially, the more holders receive profits, the greater the likelihood of massive profit realization. Charles Edwards notes that new historical highs of the last month have accelerated this process, and profit taking has already begun. If the price of Bitcoin begins to fall, followed by the share of addresses in the profit zone, the market may soon become bearish.
Percentage of Bitcoin addresses in profit. Source: Glassnode (Capriole Investments)
US liquidity Finally, the fourth high-risk indicator, which is one of the main signals, is the annual change in the liquidity of US financial institutions.
Liquidity drives markets. There is a very strong correlation between its chart and the history of the Bitcoin price. Upx is good for Bitcoin, down is bad. Over the last two weeks we have been observing possible signs of a (local) top. If this downward trend continues, it will cause concern.
Liquidity of financial organizations in the USA. Source: Capriole Investments
In conclusion, the expert investor warned about the initial signals of a possible peak in the price of Bitcoin and other cryptocurrencies in this cycle. However, these indicators are still not in a critical phase, and in the medium term Capriole Investments predicts a continuation of the bull market.
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