Bitcoin’s recent price correction may be nearing its conclusion, according to fresh insights from on-chain analytics platform CryptoQuant. The data suggests that the current market environment is closely resembling the patterns seen during Bitcoin’s 2024 pullback, signaling that the digital asset could soon be poised for a renewed rally—though a brief consolidation phase may still precede the next upward move.

One of the most telling indicators in this analysis is the age band of Bitcoin held between one week and one month. This metric is used to assess short-term speculative activity, which typically rises during bull runs and cools off when the market enters correction territory. Historically, when the proportion of these short-term holders begins to decline, it has signaled the market is resetting—often paving the way for the next bullish phase.

CryptoQuant’s chart highlights a cycle that has repeated multiple times in this current market run. Initially, speculative activity spikes (marked as phase one), followed by an overheating of the market (phase two), and finally, a notable correction (phase three). According to CryptoQuant’s analyst, this same pattern played out prior to the 2024 mid-year rebound and appears to be happening once again. Now, the share of short-term held Bitcoin has returned to a level that previously marked the bottom of the 2024 correction cycle. This has led some to speculate that the market may have finally flushed out its excesses.

The historical context is also important. In the first quarter of 2024, Bitcoin surged to a then all-time high of $73,750, fueled by growing investor optimism and favorable macroeconomic conditions. However, the rally cooled off around April, leading to a six-month-long correction that saw the price dip as low as $49,000 by September. Geopolitical instability further pressured the market during this time. But as the U.S. presidential election approached, optimism returned, especially with Donald Trump’s pro-Bitcoin campaign promises. His eventual re-election in November raised renewed investor confidence and ignited a fresh Bitcoin rally that carried the price to record highs, peaking near $110,000 by early 2025.

In the months since reaching that peak, Bitcoin has shed approximately 32% of its value, falling to around $74,400 at one point. Although the market has recently shown signs of stabilization, volatility remains. CryptoQuant contributor Crypto Dan notes that the worst of the correction may be over, but he cautions that a full-blown bullish breakout is unlikely in the immediate term. Instead, he anticipates a short consolidation phase as the market regains its footing.

One of the key points supporting a more neutral-to-bullish outlook is the decline in speculative pressure. With short-term holders reducing their exposure and other key indicators cooling off, the market now appears to be in a healthier state for long-term growth. This is often the type of environment where larger investors and institutions look to re-enter the market, taking advantage of reduced volatility and more favorable pricing.

At the time of writing, Bitcoin is trading at approximately $84,450, reflecting a modest 0.45% increase in the last 24 hours. While some analysts still argue that Bitcoin could be slipping into a bear market, the current on-chain data paints a more optimistic picture. If macroeconomic conditions improve—such as interest rate cuts or easing inflation—Bitcoin may find itself with the fuel needed to fuel another strong rally in the coming months.

Ultimately, while it remains too early to declare a full reversal, signs suggest that Bitcoin’s overheating phase may have passed, setting the stage for what could be the beginning of its next significant move.