November Bitcoin Carnage Just One Shake Before Cycle Peak Appears?

According to the latest data, Bitcoin investors who bought at the all-time highs of 2017 or higher have yet to sell.

According to the Hodl wave index, coins that last moved within the last 6 to 12 months now make up the majority of the BTC supply.

BTC buyers are sticking to sentiment

Despite the strong rally and equally severe corrections in 2021, market participants refused to sell or to add to their positions in or after November 2020.

Hodl Waves tracks the age distribution of unspent Transaction Spending (UTXOs) and shows that a 6- to 12-month hodler-driven offer increased from 8.7% in early June to 21.4% in November 2017.

At the same time, the coins held for many years declined only slightly and showed modest selling activity and, with the exception of the 6 to 12 month pool, investor determination remained steadfast.

Bitcoin Hodl wave chart | Source: Unchained Capital

The data supports the hypothesis that virtually no BTC owners intend to sell at current prices, even at all-time highs.

However, long-term holders began handing out coins – a common trait during the spikes of the bull market. That was the last time in November last year.

Bull market “still has a lot of leeway”

Meanwhile, other numbers tracking “older” BTC also show that those who hold Bitcoin the longest will continue to “hibernate”.

As on-chain analyst William Clemente noted this week, inactivity (Bitcoin’s market cap divided by its annual inactivity) remains low as BTC price hovers near ATHs.

“The current low level of inactivity means that the old coins are still relatively inactive. This bitcoin bull market still has a lot of space. “

Bitcoin line not working | The source: William Clemente

What does the November sale mean?

Bitcoin price is struggling to hold support at $ 60,000 after falling more than 15% from local highs set earlier this month.

BTC price campaign in November 2017 (left) and 2021 (right). | Source: TradingView

The graph above compares Bitcoin price action and the current Relative Strength Index (RSI). If the leading cryptocurrency by market capitalization can hold here and rebound to new highs, a bullish divergence will be confirmed and the parabolic formation will continue.

What is striking about this setup is that it is only 4 days different from the same behavior that only occurred 4 years ago. Both times, Bitcoin corrects in mid-November after hitting new highs, but what happens next? Does price action now follow the same fractal (the now repeating pattern) on the final night of the dramatic ending in December?

Despite the recent downtrends, the monthly technical picture is starting to turn bullish and it could still do so. But the excitement about new all-time highs earlier in the month created too much leverage in the market, which was previously erased but hit again.

Sentiment has shifted rapidly since then, pulling in shorts that eventually increased pressure – much like how far too many longs drove the market back towards $ 60,000. The November 2017 sell-off changed radically at an incredibly rapid pace, causing prices to surge 250% over the next 30 days, marking the final high of this year’s bull market. Are we seeing the same thing this year?

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Minh Anh

According to AZCoin News

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