Bitcoin Pullback Deepens: Is the 2023-2024 Bull Cycle Losing Steam?

• Bitcoin’s pullback marks its most significant dip in the 2023-2024 bull cycle.
• BTC drop pushed 2.8 million BTC into losing positions.
• The pullback opened opportunities for more buyers to accumulate BTC.

Bitcoin’s recent pullback is its most significant dip in the 2023-2024 bull cycle, with the flagship cryptocurrency falling more than 26% from its all-time high of $73,794. The drop pushed Bitcoin’s price below the 200-day moving average (MA), putting significant pressure on the bulls and leading to unrealized losses for many short-term holders.

Glassnode analysts observed that the recent BTC drop pushed 2.8 million BTC into losing positions based on their on-chain acquisition price. However, the platform’s data indicates it is mainly short-term holders currently feeling the pain, as most long-term Bitcoin holders who purchased the crypto several months ago are still in profit.

Meanwhile, the analysts compared Bitcoin’s 2023-2024 price action with previous bull cycles, identifying similarities and differences. The current trend comprises an 18-month steady price appreciation following the infamous FTX collapse, a 3-month sideways trend after reaching an ATH above $73,000, and the recent 26% correction that sent the price below $54,000.

According to the analysts, Bitcoin’s recent behavior is similar to the past two previous cycles, providing a valuable framework for determining the market structure and how long the trend could last. Comparing the current cycle with the previous ones, the analysts noticed that it is shorter and less volatile, leaving them to wonder if there is more potential for significant movements in Bitcoin’s price.

Notably, the volume of investors at a loss due to the recent pullback suggests that they may be new investors who entered the market following the recent spot Bitcoin ETF approval. On-chain data reflected a significant inflow of new demand after the landmark event.

Further details show a stall in the demand profile for Bitcoin in the past few months, suggesting a balance in demand and supply as of Q2 2024. However, with some long-term holders taking profits, the price declined, opening opportunities for fewer new buyers who are stepping in to accumulate BTC.