Key Takeaways
What occurred to Bitcoin through the 2024 cycle high?
The Fed charge reduce in December 2024 coincided with Bitcoin peaking at $108k. It was adopted by an almost 20% drop as STHs capitulated.
Might an analogous situation unfold now?
BTC Derivatives are overheated, and merchants are stacking large lengthy clusters, mirroring the 2024 setup.
Bitcoin [BTC] hovered close to $115k at press time, sitting proper at a key inflection level. The Concern & Greed Index at 50 signaled indecision.
Merchants are clearly ready on the Federal Reserve to set the subsequent directional bias. Curiously, historical past is giving us hints.
Fed cuts and echoes from 2024
The final charge reduce on the 18th of December 2024, hit whereas BTC was mid-bull run within the post-election cycle. Nonetheless, that catalyst ended up capping an area high at $108k.
The aftermath?
BTC fell almost 20% over a 12-week bearish cycle, and the Quick-Time period Holder (STH) NUPL plunged from 0.20 to -0.13 for the primary time in over a 12 months.
Briefly, STHs capitulated, signaling a transparent exhaustion of bullish momentum.
Supply: Glassnode
Curiously, STH NUPL was nonetheless hovering close to the purple zone whereas assessing.
For context, this metric measures STHs’ unrealized PnL. Principally, it tells us if current patrons are in revenue or bleeding.
As soon as it flips purple, it usually factors to capitulation kicking in, which tends to gasoline a sharper draw back. At press time, STH Realized Price sat close to $110k. Merely put, that’s the breakeven line.
If BTC slips beneath, STHs (coin age < 155 days) usually tend to dump. And the percentages of that taking place are clearly on the rise.
Bitcoin Derivatives flash overheated positioning
Bitcoin’s Derivatives quantity is completely blowing previous spot.
On the fifteenth of September, BTC Derivatives clocked round $242 billion versus $25 billion on Spot. Merchants stacked leverage aggressively, tilting the market closely towards Derivatives.
Curiously, this vibes with the final Fed charge reduce cycle.
Bitcoin’s Open Curiosity (OI) hit a then-ATH of $72.44 billion on the 18th of December 2024, proper round BTC’s $108k cycle high, setting off a wave of liquidations.
Supply: CoinGlass
On this context, Binance’s 24H Heatmap highlighted a chunky lengthy liquidity cluster, with merchants stacking $85.97 million in leverage round $113,652.
This reveals the market has overexposed longs.
Supply: CoinGlass
Meaning a 2024-style blow-off high isn’t off the desk.
With STHs at breakeven, derivatives overheated, and liquidity clustered, situations resembled a setup for compelled lengthy squeezes earlier than any breakout try.
