Is this the end of the cycle or is the peak yet to come?

• Bitcoin is experiencing its longest post-halving delay to a new all-time high.
• The half-cycle thesis may no longer hold due to significant changes in market dynamics and supply glut.
• Short-term holders could trigger a sell-off if prices fall further amid mixed signals from on-chain equities.

Bitcoin (BTC) faces its longest post-halving delay to a new all-time high as it trades around $58,000 on Wednesday. Unlike previous times, several supply overruns in recent months and the strong interest rate environment have heavily influenced Bitcoin’s price.

Half life thesis face questions

The delay after the halving to a new all-time high caused a significant change in the dynamics of the Bitcoin market, which relied heavily on the halving as a major growth multiplier. Some of these changes were anticipated due to the introduction of new market players and classes of investors following the launch of Bitcoin spot ETFs.

The move also saw Bitcoin make a parabolic run to an all-time high for the first time before the halving. As a result, investors exhibited somewhat opposite behavior compared to previous halving seasons.

Historically, halving seasons are typically build-up periods where investors prepare for potential upside. However, Glassnode data shows an increase in profits made during the halving season from March to April. After Bitcoin’s all-time high of $73,000 in March, long-term holders (LTH) have taken significant profits and have now slowed their efforts.

Profits made BTC 7D-MA

In addition, the current post-halving season has witnessed some of the largest supply overhangs, including the repayment of creditors from the defunct Mt.Gox exchange and the German government’s sale of seized BTC funds.

Bitcoin’s on-chain values ​​show mixed signals

As a result, the Bitcoin price faced bearish pressure that saw the price struggle below the $60,000 mark. Despite falling prices, BTC’s unrealized losses are still at 2.9% of its market cap, according to Glassnode data. Additionally, the combined unrealized profit to unrealized loss ratio is 6.19, indicating that profits are 6 times greater than losses for the aggregate investor.

However, the zoom shows that short-term holders (STHs), typically investors whose coins are less than 155 days old, bear most of the unrealized losses. “However, even for this cohort, the magnitude of their Unrealized Losses relative to market cap is not yet in full-scale bear market territory and more closely resembles the choppy period of 2019,” observed Glassnode analysts.

Bitcoin STH Relative Realized Losses

If the price of Bitcoin weakens further, it could be at risk of a strong sell-off by these cohorts, which are historically sensitive to price declines. Glassnode analysts note that Bitcoin needs to rise above the $62.5K price level to shift coins from this cohort to profitability again.

Meanwhile, more Bitcoin tokens purchased during the all-time high in March are maturing into the cohort of long-term holders, which is typical during a move into a bear market. However, Glassnode analysts noted that “the percentage of wealth held by new investors has not reached the high limits experienced during previous ATH distribution events.”

“This may indicate that the 2024 peak is more aligned with the mid-cycle high of 2019 rather than the macro highs seen in 2017 and 2021,” they added.

As a result, it is not yet clear whether Bitcoin has reached the top of the cycle or will stage another rally to a new all-time high.