- Bitcoin remains in a consolidation phase, with a 3.38% decline raising concerns about the bull market’s trajectory.
- New investors now control nearly 50% of Bitcoin’s network liquidity, reshaping ownership and trading patterns.
Bitcoin’s recent price decline of 3.38% has added uncertainty to the market, following a major correction in December. While many analysts maintain a bullish outlook, market conditions suggest a possible slowdown.
The ongoing consolidation phase has sparked debate about whether Bitcoin’s bull cycle is still intact or if a shift in market sentiment is underway.
Long-Term Holders Signal a Market Transition
Recent data from Glassnode indicates that long-term Bitcoin holders (LTHs) have been offloading their positions during Q4 2024, distributing assets to short-term traders and new investors. However, this selling activity has now slowed down, suggesting that the distribution peak may have already been reached.
#Bitcoin‘s Short-Term Holder (STH) cost-basis model is crucial for gauging sentiment among new investors. Historically, this model has tracked market lows during bull cycles and also distinguished bull from bear markets: https://t.co/6NCAPxxcrJ pic.twitter.com/hc47gBLHHc
— glassnode (@glassnode) January 10, 2025
Historically, such peaks indicate market shifts, though previous cycles have shown that price rallies can continue despite LTHs reducing their exposure.
A big factor supporting Bitcoin’s bullish case is that LTHs are not holding BTC at a loss, meaning no major capitulation has taken place. In previous bear markets, Bitcoin’s downturns have been marked by long-term holders seeing negative returns, which is not the case in the current market structure, as we mentioned in ETHNews reports.
Even at prices about 12% below ATH, #Bitcoin Long-Term Holders (LTHs) are still distributing, but at a slower rate. Yet, the 30-day percent change in LTH supply suggests that the rate of distribution has likely peaked, reaching extremes seen in previous cycles. pic.twitter.com/3ENkHW8Pvc
— glassnode (@glassnode) January 10, 2025
New Investors Dominate Bitcoin’s Liquidity
Another key development is the growing influence of new Bitcoin investors. According to Glassnode’s latest findings, new market participants now control 49.6% of Bitcoin’s actively traded liquidity, highlighting a reshaping of ownership. This shift could play a pivotal role in determining Bitcoin’s next major move, especially as short-term holders gain market influence.
The percentage of #Bitcoin wealth held by new investors (coins aged < 3m) has surged, now representing 49.6% of the network liquidity.
This infers that mature investors have meaningfully distributed coins across the uptrend, with new demand absorbing the sell-side pressure. pic.twitter.com/1qX9EuVgGA
— glassnode (@glassnode) January 10, 2025
At press time, Bitcoin is trading at $94,191, reflecting a 0.88% gain over the past 24 hours. However, its daily trading volume has declined by 3.89%, bringing total volume to $58.46 billion. While price stability remains, the decline in trading activity suggests a period of reduced momentum in the short term.
Is Bitcoin’s Bull Market at Risk?
Despite the recent pullback, Bitcoin’s overall market structure remains strong. The reduction in LTH selling pressure, combined with no long-term holders at a loss, supports the idea that Bitcoin’s bullish momentum has not fully reversed.
Bitcoin (BTC) is currently trading at $94,185.68, reflecting a 1.20% increase in the last 24 hours. Its market capitalization stands at $1.86 trillion, with a 24-hour trading volume of $20.27 billion, marking a 70.21% increase. The circulating supply is 19.8 million BTC, with a fixed maximum supply of 21 million BTC.
Bitcoin Market Trends and Network Activity
Bitcoin continues to see strong adoption beyond ETFs, with U.S. lawmakers proposing a national Bitcoin reserve, signaling potential mainstream financial integration.
Additionally, Babylon Labs and Fiamma are driving innovation in Bitcoin DeFi, utilizing trust-minimized bridges and zero-knowledge (ZK) technology, enabling new financial applications on the BTC network.
Babylon Labs teams up with @fiamma_labs to revolutionize Bitcoin interoperability with the first Trust-Minimized Bitcoin Bridges powered by BitVM2, enabling #BTC to interact seamlessly with @Cosmos chains.
Read more⬇️ https://t.co/g9V0gnBl29
— Babylon (@babylonlabs_io) January 11, 2025
On-chain data shows a surge in whale transactions, indicating accumulation by high-net-worth investors. At the same time, the Bitcoin mining industry remains strong, with hashrate levels near all-time highs, reinforcing network security and miner confidence.
From a technical standpoint, BTC is trading above its key moving averages, maintaining a bullish outlook. Resistance is forming at $96,000 – $98,000, while support sits around $92,000 – $93,000.
If BTC breaks past $96,000, it could push towards the $100,000 milestone in the near future.
With rising institutional adoption, DeFi expansion, and increasing network security, Bitcoin appears positioned for continued long-term growth.
However, if BTC faces resistance at $96,000, a short-term correction to $92,000 – $93,000 may occur before another bullish leg.
