Investing.com – He continues to fight for the psychologically significant $ 50,000 mark at the beginning of the week. It would be an important sign if BTC could close above this range. At the moment, however, it doesn’t look like it, at least not in the short term.
However, popular on-chain analyst Will Clemente believes Bitcoin is in a long-term super cycle. His assessment is based on the fact that long-term BTC hodlers are fundamentally changing the market structure of the most important cryptocurrency in terms of market capitalization.
Clemente explained to his 207,235 Twitter followers that the ‘Illiquid Supply Ratio’, a metric that measures the number of illiquid coins in relation to the total BTC supply, is showing a clear upward trend in parallel with the recovery of Bitcoin since the corona low last year having.
As a result of the corona panic on the market, the world’s largest crypto currency Bitcoin fell to 4,500 US dollars in March 2020 and thus collapsed by more than 50 percent within two months. But thanks to cheap central bank liquidity and gigantic stimulus measures by governments around the world, cyber currencies began to recover sharply. At its peak, Bitcoin went up to $ 64,700 and BTC is currently trading 966 percent above its corona lows.
“If I had to use a graphic to argue that we are in a ‘super cycle’, this would be it here. Macro-hodling behavior (holding for the sake of dear life) has changed fundamentally since March last year. That is a compelling argument for the end of the four-year cycle “, said Clemente.
One speaks of a super cycle when the supply cannot keep up with the demand over a longer period of time. This means that instead of falling into a bear market and experiencing a massive 80 percent crash, as it did at the end of the 2013 and 2017 bullish cycles, BTC will continue to rise and hit new highs.
Willy Woo, also a well-known on-chain analyst, had previously made a similar comment on the halving cycle, where BTC experienced a massive spike in the first year after halving, followed by a brutal bear market and an accumulation phase before recovering and continuation of the overall trend is coming. “I don’t think we’re going to see those typical four-year cycles again,” he said, citing the maturity of the Bitcoin market and the intersection of supply and demand from different parts of the ecosystem
According to Will Clemente change long-term hodlers, or organizations that haven’t touched their BTCs for at least five months, the narrative for this cycle.
“Structurally, it is actually different this time. Long-term Bitcoin hodlers point the way.”
Clemente also emphasizes that the number of coins owned by long-term investors has recovered significantly since the crash in May 2021 and is now at an all-time high.
“We have a new all-time high in the number of bitcoins held by long-term investors. These entities now hold 12,731,020 bitcoins. Measured against the circulating supply, these long-term investors now own 67.7 percent of the supply Excluding coins (using the adjusted supply instead of the circulating supply), that figure is as much as 84.5 percent of the supply. “
In the short term, however, according to Clemente, Bitcoin will experience profit-taking. This can be attributed to the low transaction activity and the demand for block space.
“The number of transactions and active addresses remains low, although they have increased slightly in the last few weeks. As a proxy for the demand for blockspace, the transaction fees continue to decline. This can also be seen from how empty the mempool was almost like a ghost town, “explained Clemente.
The BTC Mempool stands for Bitcoin Memory Pool and is practically the “waiting room” for all unconfirmed transactions.
A high number of transactions in the mempool indicates high traffic, which leads to a longer average confirmation time and higher prioritization fees.