Analyzing Bitcoin’s 2021 Double Peak Pattern Through On-Chain Data
The article provides an in-depth analysis of Bitcoin’s price movements during its double peak pattern in 2021. By studying on-chain data, particularly indicators such as Realized Profit and Short-Term Holder Realized Price (STH-RP), it identifies significant selling by low-cost holders as a precursor to market peaks. The analysis highlights the impact of these sell-offs before and during the peaks in April and later in 2021. Furthermore, the article explores differences in on-chain indices between the two peaks and considers whether such patterns could recur. Monitoring similar on-chain signals is suggested to anticipate potential market movements, emphasizing the importance of these indicators for traders seeking to navigate future cycles.
Bearish
The analysis of Bitcoin’s 2021 double peak pattern through on-chain data suggests a bearish outlook. The significant sell-offs by low-cost holders, as indicated in both peak periods, often lead to a market top due to increased selling pressure. The insight that similar patterns could recur means that traders should be cautious about potential sell-offs prompting market downturns. Historically, such indicators have signaled market corrections, which could affect short-term trading negatively. In the long term, understanding these patterns offers traders valuable foresight, although the immediate impact tends toward a bearish market sentiment due to the history of panic selling and subsequent peaks identified.