People are becoming increasingly optimistic about the approval of a Bitcoin spot ETF, and with upcoming events such as the Bitcoin halving and positive market sentiment, five major data points suggest that the cryptocurrency bull market began in 2023 and will continue into 2024. This article is sourced from Cointelegraph’s column “5 data points suggest a crypto bull market began in 2023 — What’s next for 2024” and compiled, translated, and written by DeepTech.
(Table of Contents)
– Increased probability of approval for a Bitcoin spot ETF
– Accumulation of Bitcoin by all investor groups
– Bitcoin halving and highlighted potential from historical data
– Continued rise in market sentiment for cryptocurrencies
– Technical indicators reflecting traders’ bullish sentiment
Despite little hope for a crypto market recovery at the beginning of 2023, this year has surprised most market participants with the skyrocketing prices of Bitcoin, Ethereum, Solana, and many other altcoins. The high volatility in the crypto market seems to be increasing, and a bull market is expected in 2024.
The global cryptocurrency market’s market cap reached $1.69 trillion, a 112% increase over the past 12 months. The prices of Bitcoin and Ethereum rose by 154% and 93% respectively. This growth was even more significant in altcoins such as Solana and Avalanche (AVAX), which saw increases of 880% and 250% respectively during the same period.
The main factors driving the rise in cryptocurrency prices include the increased probability of approval for a Bitcoin spot ETF, the successful upgrade of the Ethereum network in Shanghai, and the Bitcoin halving.
In the United States, discussions around a Bitcoin ETF continue to heat up. According to Bloomberg’s ETF analysis, the likelihood of approval for a spot BTC ETF before January 10th (the final statutory deadline for the SEC’s decision on some applications) is 90%.
If approved, such an ETF could attract more institutional investors into the field, positively impacting not only Bitcoin but also the prices of other cryptocurrencies. Bitcoin advocate Michael Saylor (founder of MicroStrategy) stated that the approval of a spot Bitcoin ETF could be the biggest development on Wall Street in the past 30 years.
Bitcoin holders have shown their confidence in BTC by increasing their holdings. On-chain data from Glassnode shows a reversal in the trend, with long-term holders displaying an optimistic outlook for the Bitcoin bull market and continuing to increase their holdings.
Tracking the balances of long-term holders has been a strong indicator for identifying price tops and bottoms. During each market cycle, the accumulation by holders is clear until the local price reaches its peak, at which point holders begin selling in large quantities to realize profits.
More importantly, Bitcoin whales holding at least 1000 BTC are showing signs of accumulation, which historically has been a sign that appears before a significant rebound.
According to a report released by Glassnode on November 27th, the accumulation trend score for Bitcoin is currently 1, indicating an overall accumulation of Bitcoin by whale investors.
The famous Bitcoin whale MicroStrategy continues to increase its Bitcoin holdings, reaching a total of 189,150 BTC after additional purchases of 14,620 BTC at an average price of $42,110 per Bitcoin.
Glassnode’s data also shows that smaller-scale investors set new Bitcoin accumulation records in 2023, constantly breaking historical highs.
As with previous cycles, this ongoing accumulation is a potential indicator that the cryptocurrency market has not yet reached its price peak.
The price trend of Bitcoin often exhibits cyclical patterns. Analysts compare the current price trajectory with historical patterns, suggesting that the current situation may be similar to the potential bull market cycles in 2013 and 2017.
Similarly, Bitcoin’s historical bull markets have often followed a four-year cycle, typically driven by events such as the Bitcoin halving, which reduces the speed at which miners create and earn new Bitcoins.
The next halving event will occur in the spring of 2024, and past data indicates that the bull market may begin a few months before the halving event and continue until the Bitcoin price reaches a new all-time high.
In fact, with less than six months until the halving event, more and more people are predicting that the price of BTC will reach six digits.
Recently, there has been a revival of positive sentiment in social media circles. The Cryptocurrency Fear and Greed Index, which serves as an indicator of investor sentiment, currently has a score of 73, indicating a widespread state of greed in the market.
It is worth noting that this index remained above 50 for most of 2023, indicating a positive attitude among market participants towards the broader cryptocurrency market.
This pattern of market sentiment has been a precursor to price increases in the past and may be an indicator of an upcoming bull market. Interestingly, the last time market sentiment reached this level of greed was in November 2021 when Bitcoin reached its ATH high of $69,000.
On October 23rd, the total market capitalization of cryptocurrencies exceeded the 50-week exponential moving average (EMA), reaching $1.1 trillion. As of the time of writing, the total market cap has reached $1.632 trillion. Buyers may have set their sights on the highest range of $2.168 trillion in April 2022. Technical traders will look for these key indicators before anticipating a reversal.
The relative strength index (RSI) of the global cryptocurrency market cap has entered overbought territory, approaching the resistance level of 80 points, reinforcing the dominance of bulls in the market. The EMA on the weekly chart has also formed a bullish crossover.
Furthermore, if buyers establish support above the $1.75 trillion major level with positive trading volume, the three-month uptrend may continue into 2024.
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