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- Bitcoin conditions are "similar to the second half or later stages of a bull market," crypto analysts said.
- Glassnode's report pointed to signs of long-term holders spending coins and a reduction in big wallets.
- Talk of a bitcoin price plunge has grown, with a crypto entrepreneur saying there could be a 90% drop.
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Bitcoin may be entering the second half or later stages of a bull market, according to crypto analyst Glassnode, as nervousness grows in some quarters about a possible plunge in the price.
Glassnode's weekly analysis report found there had been a pick-up in "wealth transfers" from long-term bitcoin holders to newer speculators, which the company said was reminiscent of previous market peaks.
The report said bitcoin bull markets eventually reach a "euphoric top", which materializes as big holders increasingly spend their coins to realize profits.
Glassnode estimated long-term bitcoin holders had reactivated about 9% of supply so far in 2021 by spending coins, although this was below the 17% reactivation seen before the market's crash in 2017.
"These studies suggest conditions are similar to the second half or later stages of a bull market," Glassnode said.
The bitcoin price (BTC) was down 6% on Tuesday to $54,294, well off a high of $62,000 earlier in March, but still up around 700% from a year ago.
Glassnode also said on Tuesday that the biggest players – wallets with 1,000 to 10,000 BTC – had cut their holdings by 307,000 bitcoin since December.
Read more: Hedge funds are ramping up bets against Chamath Palihapitiya's SPACs and have already taken home $40 million this year. Here's a detailed look at the wagers they're making.
Investment manager Timothy Peterson tweeted recent falls in big holdings "are often, but not always, associated with bear markets."
On Monday, crypto exchange founder Bobby Lee told CNBC 2021 is a bull market for bitcoin, of the sort that comes around every three, or four years. He said the bitcoin price could "potentially" go as high as $300,000 this year.
Yet Lee said the "bubble" was likely to pop. "People should be aware that it could fall as much as 80% to 90% of its value from the all-time peak," he said.
However, many bitcoin advocates point to growing institutional interest as a reason why bitcoin is unlikely to crash like it has in the past. Visa, Morgan Stanley and JPMorgan are some of the latest big names to get involved.
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