Are We Witnessing the Dawn of a New Price Rally?

Bitcoin experienced predominantly sideways trading throughout January. The primary cryptocurrency briefly dipped to a low of $38,500, its lowest in two months, before rebounding to surpass $43,000. However, the latest data indicates the emergence of a potential uptrend in prices upon gauging the long-term holders’ movement patterns.

Short-term Bitcoin holders may have capitalized on gains during the mild upsurge last month, but the long-term cohort remained steadfast, as depicted by the increasing density of Binary CDD data, revealed by CryptoQuant analyst ‘Mignolet.’

Bitcoin’s Bullish Signals

The Binary CDD data, accompanied by an 182-day moving average, offers insights into the start of a bullish trend. The analysis also indicated the data surpassing the accumulation period, which essentially signals the potential onset of an upward price cycle.

Binary CDD, or Coin Days Destroyed, serves as a key metric reflecting the movement patterns of long-term Bitcoin holders. Within this framework, a high density of Binary CDD data signifies frequent movements by these holders. Interestingly, this pattern mirrors the cyclical nature of Bitcoin’s price movements.

During upward cycles, the movement of long-term holders intensifies as prices ascend. Conversely, in downward cycles, this movement diminishes. This cyclical pattern has echoed through previous market cycles, underlining its significance in understanding the trajectory of the largest digital asset.

The density of Binary CDD data is increasing.

“It’s still worth monitoring, but finally, it has broken out of this range.”
by @mignoletkr

Full Post👇https://t.co/d4OWhKkVK5 pic.twitter.com/mCYWDyocL9

— CryptoQuant.com (@cryptoquant_com) February 5, 2024

CryptoQuant’s analysis further revealed that Bitcoin has broken free from the constraints of its previous range. Should it decisively surpass this threshold, a full-fledged upward price cycle could be on its way.

Bitcoin Accumulation Trends

The latest projection comes amidst the strong demand for Bitcoin. Moreover, Bitcoin whales have been actively accumulating and have boosted their holdings to significant levels.

In fact, large whale wallets have increased in number over the past week while smaller addresses have fallen. A Santiment analysis showed that 47 more wallets have sprung up, holding 1k-10k BTC, marking a 2.5% growth over the same period, while addresses with 100-1k BTC have declined by 1.1%.