Nadeau Warns of Déjà Vu From 2021 Cycle

Bitcoin long-term holders (LTHs) are actually distributing BTC again into the marketplace for the third time within the present cycle.

Their present conduct might outline the trajectory of the continued cycle.

Repeat 2021-Model Cycle High?

Within the 2021 cycle, long-term holders started their fundamental distribution section between November 2020 and March 2021. Within the course of, this cohort of BTC holders trimmed their provide by 13.5% simply earlier than Bitcoin’s April 2021 peak, which Michael Nadeau, founding father of The DeFi Report, argues was the “true” cycle high.

These cash have been transferred to short-term holders (STHs) and launched new liquidity into the market. Nevertheless, LTHs quickly re-accumulated, ending the yr with bigger positions than they started with, which explains why the second high in November 2021 was comparatively muted because it lacked the inflow of recent capital and was largely fueled by repositioning of present holdings.

Curiously, the identical construction is unfolding within the current cycle in accordance with the most recent findings by Nadeau. LTHs decreased their provide by 12.4% into what could have been the primary “true” high earlier this yr (within the first quarter Q1 2025). Since then, the re-accumulation pattern has returned, which is kind of much like the post-April 2021 section.

Regardless of this, not like in earlier cycles, the participation from short-term holders (STH) stays low, and there was minimal proof of recent cash getting into the market. Nadeau mentioned that this muted demand might cap the power of future rallies, echoing the two-top construction of 2021, the place LTH conduct and time-driven holder transitions, quite than broad inflows, formed late-cycle worth motion.

BTC Market Stays Susceptible

Glassnode’s knowledge additionally pointed in the identical route. The analytics platform discovered that regardless of modest indicators of restoration, fragility lingers beneath the floor, which has left Bitcoin weak if contemporary demand fails to make a comeback.

Whereas the spot market momentum is powerful sufficient to push RSI into overbought territory, conviction appears to be like shallow, owing to flat volumes and weakening CVD, suggesting sellers proceed urgent into power.

Futures markets mirrored excessive exercise, as evidenced by open curiosity and aggressive buy-side flows driving perpetual CVD larger, although softer funding highlighted decreased lengthy demand and a extra cautious outlook.

Choices markets advised an identical story: open curiosity climbed, however volatility spreads narrowed and skew dropped sharply, which suggests much less hedging and higher complacency, thereby growing the danger of sharp reactions if volatility resurfaces.

On-chain alerts have been combined. BTC addresses trended towards cycle lows whereas switch volumes rose, pointing to capital inflows with out broader person progress. Charges declined, reflecting weak block house demand and muted speculative stress. With profitability metrics enhancing, traders are broadly in revenue, however growing profit-taking hints at potential demand exhaustion.