Is the Crypto Bull Market Cycle Nearing Its Late Phase? Glassnode Analysts Weigh In
Bitcoin, the leading cryptocurrency, is showing historical signs typically seen in the late stages of a bull market cycle, according to a recent report by blockchain analytics firm Glassnode. This observation suggests that the current rally in the crypto market might be approaching its mature phase, with important implications for investors and market dynamics.
Signs of a Late-Stage Bull Cycle for Bitcoin
Glassnode’s analysis highlights that Bitcoin’s recent price action and on-chain metrics exhibit notable similarities to previous bull cycles, particularly those spanning 2015–2018 and 2018–2022. One key metric used to evaluate this pattern is the duration during which Bitcoin’s circulating supply remains above the +1 standard deviation band — a statistical measurement reflecting high demand and price momentum.
Currently, Bitcoin’s circulating supply has remained above this threshold for 273 days, making it the second-longest stretch on record. The longest was 335 days during the 2015–2018 bull cycle. This prolonged period near the upper price band signals that Bitcoin is sustaining momentum typical of late-cycle market behavior.
Weakening Demand Despite Price Milestones
Despite recently reaching a new all-time high near $124,000, Bitcoin’s demand appears to be weakening. The report notes subdued capital inflows in the past week and a slowdown in sell-side pressure following the peak. Realized profits have declined compared to previous all-time high surges, suggesting less aggressive trading activity around these top price levels.
Long-term holders—investors who usually increase activity during market peaks—have realized more profits in this cycle compared to previous ones except for the 2016–2017 period. This profit-taking pattern further underscores the hypothesis that the market is in the late stage of its current cycle.
“In sum, these signals reinforce the view that the current cycle is firmly in its historically late phase,” the Glassnode analysts concluded.
Altcoins Gain Traction Amid Shifting Capital
As Bitcoin’s demand diminishes, there has been a notable rotation of investor capital toward altcoins, the alternative cryptocurrencies to Bitcoin. This trend is particularly visible in the derivatives market, where open interest on major altcoins surged to a record $60.2 billion over a recent weekend, largely driven by speculative trading around Ethereum (ETH).
Ethereum’s perpetual futures volume dominance has surged past Bitcoin’s to a new all-time high, reflecting growing investor focus on the altcoin sector. Historically, such capital rotation from Bitcoin to altcoins marks the late phase of the crypto bull market cycle and often precedes an altseason—a period when altcoins significantly outperform Bitcoin in price gains.
Current Market Prices
As of Friday Asian trading hours, Bitcoin and Ethereum were trading around $112,800 and $4,250 respectively, reflecting some price consolidation after recent highs.
What This Means for Investors
Investors and traders should be aware that these patterns could indicate the bull market is maturing, which may bring increased volatility and potential shifts in market leadership from Bitcoin to altcoins. While the crypto space continues to offer opportunities, especially in altcoins, cautious assessment of risk and timing is advisable given the signals highlighted by Glassnode.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Past performance is not indicative of future results.
Related Coverage:
- Bitcoin Price Forecast: BTC steadies at $113,500 as traders await Powell’s Jackson Hole speech
- Ethereum Price Forecast: ETH risks selloff as supply in profit tops 90% ahead of Fed chair’s remarks
- MetaMask to launch mUSD stablecoin in partnership with Stripe’s Bridge
[Source: Glassnode via FxStreet]