Recent on-chain data has indicated that Bitcoin has taken a significant leap, a move that previously resulted in rallies of no less than 99% on the three previous occurrences.
The consequential development is a result of Bitcoin crossing the cost basis for so-called “Single Cycle HODLers” (SCHs). To better understand the implications of this movement, it is important to deconstruct and comprehend these terms.
Long-term holders (LTHs) are investors who have retained their Bitcoins for a minimum of 155 days. Comprising individuals commonly dubbed as ‘diamond hands’ or HODLers, these investors exhibit an unwavering conviction in the face of market volatility, often refraining from selling their holdings.
Amongst these, “single cycle HODLers” (SCHs) denotes those LTHs who purchased Bitcoin within a singular cycle, traditionally spanning from 6 months to 3 years. The eldest in this cohort, who have held onto their Bitcoins for the full spectrum of 3 years, have experienced the full volatility of the current cycle, witnessing the apex of 2021’s bull cycle and the trough of 2022’s bear cycle.
The term “cost basis” signals the average purchase price of a clustered group of Bitcoin investors. An asset’s trading price falling below this benchmark infers a state of net loss for the group in question, and vice-versa for the asset being traded above the cost basis.
According to recent trends, the cost basis for single-cycle LTHs currently stands at $34,150, a value which Bitcoin has surpassed in its latest rally. Consequently, the average SCH who were incurring losses since early 2022, are now witnessing profits.
The trajectory of Bitcoin post infiltration of this level, as illustrated in a graph, shows striking patterns. Rallies of 4,778% and 787% ensued the last two breaches in 2016 and 2020, respectively. Additionally, an upward swing of 99% was observed post breach of the cost basis in the recovery rally commencing April 2019.
If history is to be considered a dependable guide, Bitcoin could potentially undergo a surge following its recent rise above the cost basis of single cycle HODLer. Given its similarity to the pattern observed in the April 2019 rally, any forthcoming surge might follow suit.
However, Bitcoin’s behavior has been rather quiet recently, recording a meager gain of 2% in the last week, and is currently trending above $35,200. In the near term, Bitcoin seems to be consolidating its position.
While the future trends of Bitcoin remain unpredictable, staying informed about the potential rewards and risks associated with digital currency investments is key. Therefore, relating this to another form of digital trade, online casinos, is an interesting segue. Similar to the cryptocurrency market, online casinos also present opportunities for attractive yields. For those interested in exploring this avenue, we at the West Island Blog have compiled a comprehensive list of the top online casinos available this month that are worth considering. Just as with any form of investment, it’s essential to stay informed and understand the game before you dive in.
