Current Bitcoin Behavior Has Hallmarks Of Emerging Bull Market: Analyst

March 18, 2024

Bitcoin, the world’s oldest crypto asset, is exhibiting early signs of entering a bull market, characterized by distinctive trading patterns and robust investment inflows. Despite experiencing volatility, the continued influx of investments and historical trends indicate that Bitcoin is primed for a significant upturn, according to a research analyst.

Bitcoin ended the previous week with a slight dip, settling at about $68,400, reflecting a 0.8% decrease from the prior week’s close of $69,000. Over the past week, the king of crypto experienced notable volatility, with its value swinging by 13.4%, Matteo Greco, research analyst at the publicly listed digital asset and fintech investment business Fineqia International said in an analysis sent to The Daily Shib.

The past week started on a high note as Bitcoin surged to $72,000 on Monday and continued its upward trajectory, hitting a new all-time high of nearly $73,800 by Thursday after maintaining levels above $73,000 for consecutive days. But, on the day that Bitcoin hit a new ATH, it also experienced a sharp downturn, with the price plummeting to $68,000, though it managed a recovery to approximately $71,400 by the day’s end, the analyst added. 

Despite facing downward pressure on Friday and Saturday, pushing the price to a low of $64,700 and a close of around $65,300 on Saturday, Bitcoin regained momentum on Sunday, nearly erasing its weekly losses and closing at about $68,400. Amid volatility and price fluctuations during the week, spot Bitcoin exchange-traded funds (ETFs) maintained strong momentum, making net inflows on every trading day.

The past week saw over $2.5 billion net inflows with $1 billion recorded on Thursday alone. Since its official launch in the U.S. spot Bitcoin ETFs have amassed around $12.2 billion cumulative net flow, underlining sustained investor interest and confidence in the cryptocurrency market.

Greco also underlined that BTC Spot ETFs have shown an impressive uptick in trading volume, amassing a total of $141.7 billion since their launch, with a notable $28 billion of that traded just in the last week. This surge in activity pushed the daily trading volume to over $5.5 billion last week, lifting the average daily volume since inception to about $3.15 billion.

This robust activity signals a continued flow of investments from the traditional finance sector into the realm of digital assets. Despite a relatively stable price for BTC last week, the driving force behind this demand has been ETFs, contrasting with the selling pressure from native digital asset investors.

A clear shift is observed in the dynamics of BTC ownership, particularly among long-term holders, defined as those who have held BTC for at least 155 days. From the start of 2024, the quantity of BTC held by these long-term investors has decreased from nearly 16.3 million to about 15.1 million. 

This reduction suggests that while traditional investors are increasingly engaging through ETFs, those who built their positions during the lower price periods of 2022 and 2023 are capitalizing on recent gains, contributing to a decrease in the supply held by long-term holders.

“Such behavior is characteristic of early bull phases, where long-term holders distribute assets to new investors. If the current market remains in an uptrend, analyzing the past cycles, this pattern could persist until the supply from long-term holders matches the demand from new investors, which usually coincides with the cycle’s peak and the beginning of a downtrend phase,” the analyst said, before adding, “Notably, the BTC halving is approximately one month away, historically preceding cycle peaks between 6 and 12 months later. If historical patterns repeat, the current cycle’s peak could occur in late 2024 or the first half of 2025.”

As of 10:23 a.m. ET on Monday, Bitcoin was spotted trading at $66,749.36, buoyed by a hefty 24-hour trading volume of $43,803,880,768. BTC has experienced a slight dip of 0.89% on the day and has shed 7.70% over the past week. 

Despite these short-term fluctuations, Bitcoin boasts a robust 28.66% increase over the past month. Standing tall at the pinnacle of the CoinMarketCap rankings, Bitcoin holds the #1 spot with a staggering market cap of $1,312,141,442,976, supported by a circulating supply of 19,657,737 BTC, latest data from CoinMarketCap showed.

Read More

Leave a Reply

Your email address will not be published.