Since the beginning of 2023, Bitcoin has risen more than 140%, twice the rate of gold over the same period of time, but the situation remains within the early, rather than late, stage of a bull cycle. it says in a new weekly report from analytics company Glassnode, writes RBC Crypto.
According to analysts, the price dynamics of the first cryptocurrency are similar to periods of past market cycles in 2013-2017 and 2017-2021. A distinctive feature of the current cycle is the small depth of regular price pullbacks, which, according to experts, indicates increased demand against the backdrop of a reduction in the real supply of the first cryptocurrency.
The size of corrections in a bull market. Source: Coinglass
Analysts also highlight that the volume of deposits on centralized trading platforms remains low even after a prolonged period of rising prices for cryptocurrency assets.
Number of deposits to centralized exchanges. Source: Coinglass
The report also notes that since the beginning of the year, the share of Bitcoin coins whose owners are in profit has increased from 56 to 84%. Typically, such dynamics indicate a transition to the acceleration stage of the bull market.
Share of Bitcoin coins in profit. Source: Coinglass
To summarize, the analysts explained that the current daily net realized profit ($324 million) is an order of magnitude lower than the values observed during the later stages of the bull market in past market cycles (over $3 billion in 2021).
At the end of November, Glassnode analysts published a report in which they estimated the volume of investments in the cryptocurrency industry after the approval of exchange traded funds (ETFs) for Bitcoin at $70 billion. According to experts, the current macroeconomic situation encourages investors to invest in safe assets, and Bitcoin fits this role perfectly.
Several large institutional players have already submitted applications for Bitcoin ETFs. The launch of these investment products is considered in the crypto community to be the catalyst for a new bull cycle in the market. Bloomberg Intelligence analysts previously estimated the likelihood that the SEC will approve the ETF in early January 2024 at 90%.
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