As Bitcoin rose 45% last month, many market participants began discussing whether Bitcoin has reached a 'local top' or will continue to break through until the end of the year. Although no one can accurately predict the future direction of the market, combining intuition, experience, and data analysis can indeed help us better assess the current position of the cycle.
1. Long-term Holders vs. Short-term Holders
（1）Long-term Holders
Currently, about 69% of Bitcoin's supply is held by long-term holders. Long-term holders are those who have held their coins for over a year or even several years. Historical data shows that when the number of Bitcoins held by long-term holders exceeds 60%, the market is usually close to its peak. For example, when Bitcoin prices peaked in 2021, long-term holders held about 58% of the circulating supply. Therefore, as the bull market continues, long-term holders may start to sell off, and price increases may require new capital to continue rising.
（2）Short-term Holders
Short-term holders are new investors in the market who typically chase the market during the early stages of price increases. When the price of Bitcoin rises, the proportion of short-term holders usually increases, especially during periods of high market enthusiasm. Currently, about 16.6% of Bitcoin's supply is held by short-term holders. Historically, the proportion of short-term holders has exceeded 25% in both 2017 and 2021.
2. Exchange Liquidity
（1）Exchange Balance
Currently, Bitcoin's exchange balance is declining. Generally, when market prices rise, more Bitcoins should enter exchanges. However, the current trend is the opposite, with Bitcoins flowing out of exchanges, indicating that investors prefer to transfer them to self-custody wallets. Similar to the situation at the beginning of 2021, the exchange balance is decreasing, and the demand for Bitcoin in the over-the-counter (OTC) market is increasing.
（2）Financing Rate
The financing rate in the futures market reflects the market sentiment of both bulls and bears. The current financing rate is relatively low, at about 0.012%. When the price of Bitcoin was close to $100,000, the financing rate reached 0.025%. Historically, when the financing rate is high, the market is usually in a state of excessive leverage, posing higher risks, while the current low financing rate indicates that the market structure is relatively healthy.
3. Market Value to Realized Value Ratio (MVRV)
The MVRV Z-Score reflects the relationship between Bitcoin's current market value and its realized value (network cost basis). The current MVRV is 3.17, meaning that Bitcoin holders have an unrealized profit of 217%. At the peak of the 2021 cycle, the MVRV was 7.5, indicating that the average return on Bitcoin was 650%. Currently, both long-term and short-term holders have MVRVs at relatively healthy levels, which may continue to rise towards the end of the cycle.
4. Pi Cycle Top Indicator
The Pi Cycle Top Indicator predicts market peaks through the crossover of short-term and long-term moving averages. When the short-term average crosses above the long-term average, it usually indicates that the market is overheated and nearing a peak. Currently, the Pi Cycle Indicator has not shown a strong upward trend, so the market still has the potential for sharp rises or falls.
5. Market Sentiment
From a market sentiment perspective, we have entered the 'Extreme Greed' phase. This is a sign of a bull market, but it also requires caution regarding the risk of a bubble. Historically, when the market reaches a true peak, it is often accompanied by a myth of a 'new normal,' where many believe that prices will continue to rise. Although there are some signs of bubbles in the market, such as the return of meme coins and AI agents, extreme greed has not yet fully manifested, so we may see even stronger increases.
6. Trend of SPX6900
SPX6900 is a meme coin that has attracted a large number of new investors in recent years. The popularity of meme coins indicates that retail interest in the market is increasing, and these assets are often highly volatile. The growth of SPX6900 reflects speculation and the trend of high-risk investments in the market, which is also an important signal for the current cycle.
7. Local Top or Full Sprint?
Currently, Bitcoin prices may further rise in the short term, potentially reaching $120,000 before Christmas. However, this does not mean that the bull market will remain unchanged. By 2025, influenced by broader macroeconomic factors, Bitcoin's price may still have the potential to go higher. Attention needs to be paid to global liquidity conditions, the US dollar index, CPI data, and the Federal Reserve's policy dynamics.
