Breaking Down Bitcoin’s Historical Trends: The Power of 2-3 Year HODLing

While cryptocurrencies are known to be volatile, understanding the behavior and distribution patterns of Bitcoin holders over a two or three-year period is crucial for predicting market trends and potential returns.

CryptoQuant’s latest analysis found that investors who hold BTCs for 2-3 years often reap the most significant returns over a 4-year cycle.

Profits and Patterns of the 2-3 Year Bitcoin Holders

Examining the Realized Cap-UTXO Age Bands (%), this cohort emerges as a key player, constituting a substantial 32.29% of the total realized capitalization percentage of all age groups combined.

Notably, this percentage is at an all-time high, signifying a growing trend of long-term investment in BTC. The data suggests that more investors are opting to hold their assets over an extended period.

Delving further into the historical significance of these investors, the analysis observed when Bitcoin reached its local peak in June 2019, the Realized Price of the 2-3-year holding group recorded significant profits.

The market price at that time was $11,955, while the realized price for this cohort was $1,228. Remarkably, the current market price is still hovering around the resistance zone of this cohort’s realized price, indicating continued relevance and influence.

However, it is important to note that long-term investors who entered the market between January 2021 and the present are still near the break-even point. Utilizing the Net Unrealized Profit/Loss (NUPL) data for this cohort, losses appear to be approaching the zero boundary. This stands in stark contrast to the recovery phase in 2019, when this group experienced significant profit levels.

Minimal Risk of Rapid Distribution by Top Capitalization Group

In light of this comparative data and setting aside the anticipations surrounding the SEC’s decisions and broader macroeconomic conditions, the analysis suggests a neutral outlook.

The report further stated that the risk associated with the largest percentage of realized capitalization swiftly distributing and exerting pressure on market prices appears minimal.

“Based on comparative data, ignoring the excitement and anxiety caused by the upcoming ETF decision and the positive macro situation, I do not see a risk when the group with the largest percentage of realized capitalization will quickly distribute and put pressure on the market price.”