Recent on-chain data suggests Bitcoin may be entering a promising phase similar to patterns observed during 2024’s correction. Key metrics indicate a stabilization in market sentiment, likely leading to potential upward trends in 2025, despite immediate rebounds not being forecasted. Current price stands at $84,450, reflecting a modest rise.
Bitcoin has navigated various challenges in 2024, yet recent on-chain data from CryptoQuant offers hope for investors. The analysis reveals potential cyclical patterns reminiscent of previous market behaviours, particularly noting the dynamics between short-term holders and market trends.
A key focus is the percentage of Bitcoin held for one to four weeks, serving as an indicator of speculative activity. Historical trends reveal that as market rallies occur, this metric often spikes before subsequent price consolidations or declines.
This observable pattern of increased speculative engagement, followed by an overheating peak and ensuing correction, has transpired twice in the current market. Recently, the short-term holding percentage has reverted to levels typically indicative of a market bottom observed during the 2024 correction.
Analysis of the Bitcoin age band reveals that the segment of tokens aged one week to one month has returned to thresholds comparable to those prior to the mid-2024 rebound. This suggests a potential removal of speculative excess from the market.
During the first quarter of 2024, Bitcoin achieved significant highs, reaching approximately $73,750. However, this peak was followed by a decline lasting roughly six months, with prices bottoming out around $49,000 amidst political tensions. However, optimism surrounding Donald Trump’s pro-Bitcoin promises contributed to a rebound post his election victory in November.
This rebound saw Bitcoin achieving new record highs consistently until late January 2025. Since then, the market has faced volatility, experiencing a 32% drop from its $110,000 peak to $74,400. On-chain data indicates that this pullback phase may be concluding, but immediate rebounds are not anticipated.
Crypto Dan indicated that while a brief consolidation may be on the horizon, overall structural conditions appear conducive for a potential upward trend. Should macroeconomic factors become supportive, 2025 could represent a resurgence in growth for Bitcoin.
With on-chain metrics stabilising, market sentiment is neutral to bullish, suggesting a period conducive for accumulation. Despite some analysts indicating a bear market based on different data, the current picture aligns with a healthy reset leading to a potential Bitcoin rally.
As of now, Bitcoin trades at $84,450, marking a modest increase of 0.45% in the past day.
Disclaimer: This article serves informational purposes and is not to be construed as financial advice. The opinions expressed are those of the author and do not necessarily represent the views of The Crypto Basic. Readers should conduct thorough research prior to investing, as The Crypto Basic assumes no responsibility for financial losses incurred.
