Bitcoin enthusiasts are eagerly waiting for a new speculative cycle that will trigger a bull run, according to new analysis by Philip Swift, the creator of LookIntoBitcoin data resource and co-founder of Decentrader trading suite. Swift compared the price behavior of Bitcoin on the basis of the ratio of the realized price of supply, i.e. the price at which coins were last moved, which he called the RHODL Ratio. He created this metric in 2020 by comparing relative ages of coins that transferred from one week ago to those that moved 1-2 years ago. This ratio helps to gauge the activity of short-term holders (STHs) and long-term holders (LTHs), indicating the extent to which speculation is present on the market.
Currently, Swift believes that speculative activity is on the rise and that a new bull cycle has already begun. He stated, “When I created the bitcoin RHODL Ratio indicator in 2020, one thing that struck me was how it showed a new bull run forming… when the younger coin ratio value began to increase. Which is where we are right now. Don’t panic about small price pullbacks. Zoom out.” Checkmate, lead on-chain analyst at Glassnode, also echoed Swift’s sentiments, calling the RHODL Ratio one of the greatest onchain finds.
On the other hand, Swift argued that on short timeframes, market participants remain risk-off on crypto markets, evident from the funding rates on exchanges. Swift’s scan of funding rates on exchanges generated several “bearish” ratings for Bitcoin, including open interest and long/short ratio in addition to funding rates themselves. Despite this, Swift is confident that a new bullish cycle has begun.
Earlier this month, Swift shared an updated forecast regarding the price of Bitcoin in the final year before its next block subsidy halving. According to him, a return to $20,000 is not out of the question. However, it is important to remember that every investment and trading move involves risk, and readers should conduct their own research when making investment decisions.
Bitcoin has been through a lot in recent months. Elon Musk’s tweets, China’s crypto crackdown, and Environmental Protection Agency’s proposal of new rules for the crypto industry are some of the factors that have impacted the market. Despite these challenges, Bitcoin has experienced an overall upward trend in 2021. The cryptocurrency started the year with a price of $29,386 and reached an all-time high of $64,863 in April. The market has been slightly volatile since then, but the price remains above $40,000, indicating that investors are still optimistic about Bitcoin’s future.
In conclusion, Swift’s analysis of Bitcoin’s RHODL Ratio indicates that a new speculative cycle is on the horizon that will trigger the next bull run for Bitcoin. While short timeframes may see bearish activity, the long-term outlook seems bullish. As always, readers should conduct their own research and invest wisely.
