Markets
Bitcoin Price Drops Amid Concerns About Market Cycle Peak, Analyst Says
Bitcoin Price Drops Amid Concerns About Market Cycle Peak, Analyst Says
BitcoinThe price of has fallen 1.35% in the past 24 hours, now sitting 16% below its all-time high of $73,835, reached on March 14. Over the past 30 days, Bitcoin has fallen 9.2%. This downward trend in June has led market analysts to speculate whether Bitcoin has reached its “cycle high.”
Charles Edwards, founder of Capriole Investments, highlighted Multiple on-chain metrics point to Bitcoin’s failure to reach new highs after two retests, which he interprets as a “sign of weakness.” Edwards emphasized the importance of Bitcoin’s long-term holder (LTH) inflation rate, which has steadily increased over the past two years.
According to Glassnode, this metric measures the annualized rates of accumulation or distribution of Bitcoin holders relative to the daily issuance to miners. At the peak of a bull market, market inflation typically crosses the nominal threshold of 2.0, signaling a high probability of a cycle peak. Currently, the LTH inflation rate is 1.9.
Another key metric, Bitcoin Dormancy Flow, has also been on the rise over the past three months. This on-chain metric measures the number of coins spent relative to the overall trend. Data from Glassnode reveals that Bitcoin Dormancy Z-score has increased significantly over the past 90 days. Edwards noted that this metric peaked in April 2024, indicating that the average age of coins spent has increased. Historically, peaks in Dormancy Z-score have preceded cycle peaks by about three months.
Additionally, growing clusters and spikes in Spent Volume could signal a market peak. Edwards noted that sudden growth in Bitcoin Spent Volume over 7-10 years has historically signaled the end of a cycle. He highlighted a dramatic increase in Bitcoin on-chain movement in 2024. Edwards attributed part of this movement to the defunct cryptocurrency exchange Mt. Gox, which is preparing to repay its creditors over $9 billion in Bitcoin.