When we analyze the process of cyclical trend changes, the data we use, such as turnover cost, profit realization, demand inflow, and hot supply, are mainly based on the "price stamp". However, if we want to observe and analyze the time characteristics of the BTC macro cycle, we need to use the "time stamp" more.
Each BTC exists in a certain UTXO, and the time stamp function of UTXO means that each BTC has an age, which is not the time it was mined, but the time from the last movement to the current time.
We can distinguish BTC of different coin ages by time length, such as dividing them into 1 week-1 month (1w-1m), or 1-2 years (1-2y), etc. Usually, we classify BTC that have not moved for more than 6 months (accurately more than 155 days) as long-term holder (LTH) coins, and the rest as short-term holder (STH) coins.
Looking back at the entire history of BTC, during each bull market cycle, LTH will distribute their coins to STH; at this time, the proportion of wealth owned by the "old coin group" will gradually decrease (as shown by the green dotted line in Figure 1).
Among the large group of LTH, the groups with the greatest impact on the cycle transition, and even the decisive role, are the 1-2y and 2-3y coin age groups (diamond hands in the cycle). We can roughly infer the "time stamp" of this bull market cycle by observing the trend of changes in this data.
Figure 3 shows the data on the proportion of realized market value of the 1-2y & 2-3y groups. First, from the overall perspective, whenever the yellow (1-2y) and green (2-3y) waveforms reach their peaks, it means that the market is about to emerge from the bear market and enter the early stage of the bull market. As time goes by, the waveforms begin to gradually decline, indicating that this group is distributing their coins to new entrants to the market.
When the waveform drops to the bottom and the slope begins to flatten, it means that the market is in the mid-to-late stage of the bull market, and can also be considered the "top range" of the bull market. It should be noted that these two groups are the most experienced investors in the market. For example, MSTR's BTC purchases in December 2021 to January 2022, three years ago, belong to this group. They were STH when they bought, and have now become LTH.
Currently, this data has declined from a peak of 56% to 12.3% (the green dotted line in the figure), while the lowest values in the previous two cycles were 1.3% (17-18 cycle) and 6.6% (21-22 cycle). Considering the increasing participation of cross-cycle institutional investors like MSTR, I believe that the lowest proportion of the 1-2y & 2-3y group in this cycle should be higher than the 6.6% in the previous cycle, and is likely to be between 7%-10%.
If we use the current value as a benchmark (Point A) and draw a standard line (see the red dotted line in Figure 1), we can see that in the previous 2 cycles, when the indicator dropped to the same position, the price of BTC was in the top range, relatively in the mid-to-late stage of the bull market. As time goes by, the curve gradually touches the bottom and starts to turn upward, and when it returns to the original height (Point B), it usually means the end of the bull market.
From A to B is a "smile curve", and in the 17-18 cycle the entire process took 17 months, the 21-22 cycle took 12 months, and based on the analysis above, the probability that the lowest point of this cycle will be higher than 6.6%, so I think the probability that the "smile curve" will last less than or equal to 12 months (entering the bear market) is greater.
At the same time, we can see that in the 17-18 cycle, the time from Point A to the last high point of the cycle was 6 months (Figure 3 annotation 1); in the 21-22 cycle, the time from Point A to the last high point of the cycle was 10 months (Figure 3 annotation 2).
Since the 17-18 cycle was a very special sharp top, its reference value is relatively low; the more valuable reference should be the 21-22 cycle double top cycle; therefore, I believe that the probability of this cycle from the current Point A to the future Point B being less than or equal to 10 months, or perhaps around 9-10 months, is greater.
If this inference is valid, then the end of this bull market cycle will likely occur around September-October 2025.
Note! All the probabilistic inferences above are my personal subjective views, not the objective feedback of the data!
After discussing the relationship between coin age conversion and cycles, let's look at it from another angle - metaphysics! Three-line synchronous resonance curve
I roughly counted that in the background messages I received, the frequency of mentioning the "three-line convergence" indicator was the highest. The partners seem to be very obsessed with this; although I know that this indicator has shown amazing accuracy in this cycle, I still believe that we should not put the cart before the horse. We should first look at the objective data, and then use the "three-line convergence" to cross-reference.
Based on the information feedback in the figure, I give the following relatively subjective interpretations, and the partners should view them rationally and not use them as the only basis for judgment!
1. The red line has now reached a critical turning point. From the position, the red line is closer to the blue line, and the distance from the upper green line has widened, and there is no consistent convergence of the three lines.
That is to say, in the mid-to-late December to mid-January period, there are 3 possible deviations: continue to break new highs (Figure 4 annotation 1) / consolidate (Figure 4 annotation 2) / pullback (Figure 4 annotation 3); but from the overall trend, the green and blue lines are in a pullback state during this stage. Therefore, I personally think the probability of 3 and 2 is greater than 1;
Emotionally, I hope it's 2, and the possibility of 1 is the lowest; of course, a moderate pullback will also be more conducive to the continuation of this trend.
2. Some partners may remember that in my previous analysis of the "three-line convergence" indicator, I mentioned: "Around December 2024 to January 2025, MVRV will experience a significant pullback". Currently, from the comprehensive observation of other on-chain data, this so-called "significant" may not be as large as imagined. There are two reasons:
a. In the current on-chain coin structure distribution, there is a huge 60 million BTC column at the $97,000 level, and there is an accumulation of nearly 200 million BTC in the $9,400-$10,000 range, forming a potential support zone.
b. From the current new demand data, although there is a decline, it has not quickly dropped below the zero axis. That is to say, the market still has a certain scale of demand and can maintain a certain degree of balance.
3. In the figure, the green and blue lines converge at the location marked 4, and the convergence position is significantly higher than the current (Figure 4 annotation 4), indicating that there will be another wave of the market in March-April 2025.
Based on the current "on-chain average turnover cost" and "active investor average cost" data, I estimate that the price of BTC in March-April has a certain probability of reaching above $12,000, but not exceeding $15,000 (since the turnover cost will change, this estimation needs to be recalibrated every 2 weeks).
4. If there is this rebound in March-April, it may be the end of the trend of this cycle, and then it will depend on the changes in macroeconomic policies.
5. After that, the market may enter a 4-5 month consolidation period (as marked 5 in the figure), in the early stage of which the green and blue lines will consistently move downward; but in the middle, they will begin to separate, so there is also great uncertainty here. But overall, the high point of the wide range consolidation will not exceed the peak value of the March-April wave.
6. In September-October 2025, there will be the last wave of this cycle (as marked 6 in the figure). In the early stage of this period, the green line and the blue line will have a large separation. If the red line is close to the blue line at that time, the high point of this wave will be higher than the peak in March-April; if the red line is close to the green line, the high point will be lower than the March-April peak.
At the same time, we can see that the green and blue lines are bonded in the part circled by the red dotted line, and the position here is lower than the March-April peak. This may mean that the probability of the September-October high point being lower than the March-April high point is greater.
Interestingly, the conclusion of the "occult indicator" is highly consistent with the time-based inference based on coin age conversion in the previous text. If this is really the case, it means that the highest point of this cycle will appear in March-April 2025, and the high point that appears in September-October 2025 will be the last "top" of this cycle, and the height may not necessarily be higher than before (I personally tend to approach the previous high, not necessarily a significant increase).
From a trading perspective, once entering the top area, I still insist that as long as there are signs of stage-by-stage decline, I will firmly implement the trading discipline and make a plan for staged profit-taking, even if there may be higher highs in the future (this is a probability issue). The part of the BTC position released after profit-taking may consider switching to some quality ALTs, in order to find the second growth curve that can outperform BTC in the second half of the bull market.
The data shared in this article is for learning and research purposes only and is not investment advice.
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