• Bitcoin's realized cap surged in early 2024 but later weakened, signaling fluctuating investor sentiment and liquidity shifts.
• Long-term holders' activity cycles show accumulation and distribution phases, influencing Bitcoin’s price stability and consolidation.
• A recent -30% correction reshaped market liquidity, leading to stabilization as Bitcoin adjusts to new price levels.

According to data from Gassnode, the Bitcoin market is experiencing a phase of price stabilization. A recent -30% correction has reshaped liquidity conditions in both on-chain and futures markets. Despite prior bullish momentum, the market is adjusting to its current price range. Besides, the realized cap net position change suggests a fluctuating growth pattern.

Realized Cap Expansion and Market Trends

Bitcoin's changing market dynamics are highlighted by the realized cap net position change. Bitcoin's price stayed below $40,000 at the beginning of 2023, with a modest realized cap rise of +0.67%. However, Bitcoin saw a price increase before the end of 2023. As a result, realized cap growth grew and peaked in early 2024 at 14.7%. 

After peaking, Bitcoin entered a downward phase. The realized cap net position change began declining by mid-2024. Hence, the positive realized cap impact weakened. Later in 2024, Bitcoin experienced another growth phase, pushing its price to new highs. This period recorded a +13.2% realized cap net position increase. This second wave reaffirmed the market’s bullish potential before subsequent price consolidation.

Long-Term Holders and Market Stability

Long-term Bitcoin holders continue exhibiting cautious behavior. Their inactivity underscores a market moving sideways with limited volatility. Additionally, the Long-Term Holder (LTH) Spending Binary Indicator offers insights into the accumulation and distribution phases.

Between September 2022 and mid-2023, Bitcoin’s price steadily increased as long-term holders expanded their supply. The accumulation phase continued until late 2023. At this point, Bitcoin’s price surged. long-term holders reduced their supply, exerting downward pressure on Bitcoin’s price.

By early 2024, the decrease in long-term holder supply was followed by a correction in price. However, by mid-2024, accumulation resumed, supporting bullish sentiment. Between mid-2024 and early 2025, the price of Bitcoin gained momentum on the back of fresh accumulation. But in early 2025, a fresh distribution phase began. Long-term holders started reducing their supply, indicating probable price consolidation.

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