Bitcoin’s Entity-Adjusted Liveliness metric peaked in December 2025 and has begun reversing downward, signaling the end of the distribution phase and the start of a new accumulation period that historically lasts between 1.1 and 2.5 years.
According to analyst Axel Adler Jr., the on-chain signal means investors should prepare for an extended market reset rather than a quick recovery, although institutional demand through ETFs may alter the traditional cycle pattern.
Shift From Distribution to Accumulation
In a post published on February 17, Adler wrote that Bitcoin’s Entity-Adjusted Liveliness reached 0.02676 in December 2025 and has started to decline. The indicator tracks the ratio of spent coin days to created coin days, which is filtered to remove transfers within the same holder.
According to his chart, past cycles in 2020 and 2022 showed the same structure, where the metric peaked shortly after price highs and then trended lower during accumulation periods lasting 1.1 to 2.5 years.
Adler noted that the price of Bitcoin surpassed $126,000 in October 2025 before falling by about 45%, adding that liveliness tends to lag price because it is cumulative.
Current readings are still below short-term averages, which the market watcher said are a sign of early-stage transition rather than confirmation of a full trend. He added that a further drop in the 90-day average below the 365-day line would strengthen the case for a longer reset phase.
Analysts Weigh Holder Behavior and Macro Backdrop
Despite the on-chain signs, there seems to be no clear agreement about how severe the downturn could be. For example, in a recent interview, Matt Hougan of Bitwise said the current crypto slump is milder than earlier cycles, such as 2018 or 2022. He cited stronger infrastructure, the emergence of crypto exchange-traded funds (ETFs), and institutional participation in digital assets from firms including BlackRock and Apollo to back his stance.
Meanwhile, Coinbase CEO Brian Armstrong said that balances held on the platform by smaller investors in February have matched or exceeded levels recorded in December last year. It means retail investors are actively buying the dip, with crypto’s market cap falling by about 49% from its peak near $4.4 trillion in October 2025. However, the current decline is not as steep as the 88% wipeout seen in 2018 or the 73% drop in 2022.
Still, some commentators are staying cautious, with the likes of analyst Mippo suggesting that current conditions could still develop into a prolonged winter as valuations adjust to clearer regulations and more focus on revenue.
That said, metrics tracking long-term investors can add nuance to the overall picture. Recently, Joao Wedson of Alphractal pointed out that the Net Unrealized Profit/Loss for long-term holders sits around 0.36, meaning that overall, they remain in profit. According to him, major rallies historically kicked off only after that figure turned negative, when even patient holders faced losses.
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