Bitcoin (BTC) has been on a downward trend since April, as observed in higher timeframe charts, particularly the weekly. However, the daily timeframes have shown considerable volatility, marked by notable price surges, such as the impressive 22% rally in July, which saw BTC climb from $56,000 to $68,000. More recently, the cryptocurrency experienced a 17.5% increase, rising from $55,000 to $64,000 within just two weeks.
As we analyze these trends, the question arises: Is the Bitcoin bull run over? Many market participants are convinced that the rally to $73,700 in March signaled the end of the bull run. Some speculate that the upcoming Bitcoin halving may not ignite another price surge, given that the dynamics of this cycle appear to have shifted.
The bullish trend observed from October 2023 to June 2024 has raised eyebrows. Was this period genuinely part of a bull run? To put things in perspective, during the previous cycle, Bitcoin experienced a staggering 157% gain over just ten weeks, from the Covid crash to the May 2020 halving. Thus, it’s not uncommon to see substantial price rallies leading into halving events, and this current cycle might still hold potential.
The behavior of Bitcoin holders is another critical factor in assessing market sentiment. Current metrics suggest that a market top may not yet be upon us. The long-term holder/short-term holder spent output profit ratio (LTH/STH SOPR) has not yet surpassed the key level of 7. This threshold has historically marked the tops in the previous two cycles, indicating that holders may still have room for further price appreciation.
In the lead-up to the previous bull run, there was a significant price appreciation in 2019, which prompted profit-taking behavior among holders. During that time, the SOPR metric dropped from 2.6 to 1.1, reflecting increased selling pressure. Similarly, in the past five months, the current SOPR metric has declined from 4.2 to 1.5, suggesting that selling pressure is influencing the market but has not yet reached extreme levels.
Taking all these factors into account, the overall metrics still lend credence to the idea of further price expansion for Bitcoin in the coming months. While short-term fluctuations can create uncertainty, the historical behavior of Bitcoin and the current holder sentiment suggest that the market may not be at a definitive top.
As we look ahead, the dynamics surrounding the Bitcoin halving, combined with ongoing interest and investment in the cryptocurrency space, may pave the way for another significant rally. While the question of whether the bull run is over remains open, current indicators imply that Bitcoin could still have the potential for further growth as the market evolves.
As always, investors should exercise caution and conduct thorough research, keeping an eye on both market trends and behavioral metrics as they navigate the complexities of cryptocurrency investment.
September 2024, Cryptoniteuae