On-Chain Metrics Suggest Bitcoin May Be Approaching Cycle Bottom

Bitcoin's market structure is showing signs of a cycle bottom as on-chain data reveals a concentration of wealth among long-term holders. The RHODL ratio, provided by Glassnode, has reached 4.5, marking its third-highest level in the asset's history. This metric tracks the balance between long-term investors, typically those holding for six months to three years, and short-term speculators holding for one day to three months. A rising ratio typically signals that speculative activity is waning and coins are aging, a pattern previously observed during the market bottoms of 2015, 2019, and 2022. The current reading follows a 50% correction in Bitcoin's price over the last six months. While previous cycle lows in 2015 and 2022 saw ratios of 5 and 7 respectively—suggesting some room for further decline—current conditions differ. Bitcoin has already recovered 25% from its February lows. Broader financial conditions provide a supportive backdrop, with the S&P 500 reaching new all-time highs and negative perpetual funding rates indicating a lack of excessive leverage. Technically, Bitcoin has reclaimed its 100-day moving average, while key trend levels have shifted back above the 200-week mark.