Concerns about Bitcoin’s bullish run are surfacing after Monday’s crash. Ki Young Ju maintains his positive outlook despite being the CEO and founder of CryptoQuant – a blockchain analytics company. According to him, the on-chain data still supports the idea that Bitcoin is in a bull market despite its recent crash.
Bitcoin On-Chain Analysis: Bullish Arguments
Hashrate #1 Bitcoin
Bitcoin hashrateThe ATH, which measures the computing power used in processing and mining transactions is close to an all-time peak. Ju notes, “Miner capitulation is nearly over, with hashrate nearing ATH. US mining costs are ~$43K per BTC, so hashrate likely stable unless prices dip below this.”
Second Whale Behavior
Significant Bitcoin inflows into custody wallets are another argument to be bullish, indicating strong accumulation by large-scale investors, often referred to as ‘whales’. Highlights from Ju “Significant BTC inflows into custody wallets. Permanent Holder addresses increased by 404K BTC, including 40K BTC in US spot ETFs over the last 30 days. New whales are accumulating.”
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#3 Retail Investor Participation
Current participation levels are low. retail investors Similar patterns were observed by mid-2020. Ju comments “Retail investors are mostly absent, similar to mid-2020.” The absence of retail trading could contribute to lower volatility as it is known that price changes are often rapid.
The Old Whales are Still Hodl
In the period between March to June, those who had held Bitcoins for three or more years transferred them to younger investors. At the moment, these veterans are not under any significant pressure to sell.
There is a bearish trend in the data on-chain
#1 Macro Risks
Ju describes the negative effects of macroeconomic factors and recent markets activities on Bitcoin price stability. Crypto deposits were high by Jump Trading Binance recently reached a record high for daily deposits.
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#2 Borderline On-Chain Indicators
According to Ju, while some indicators on the chain have turned negative recently, they are still borderline. He asserts, “Some on-chain indicators turned bearish but are borderline. If bearish trends persist for over two weeks, market recovery could be challenging.”
#3 Bull-Bear Cycle Indicator Flags Bear Phase
It is noteworthy that the Bull-Bear Market Cycle Indicator flagged for the very first time a bear market phase in January 2023. (High blue area on the chart) This warrants careful observation. CryptoQuant’s Head of Research Julio Moreno said that the indicator had previously detected limited bear phases in response to significant market events such as the COVID sale-off in march 2020 or the Chinese mining prohibition in may 2021. The indicator also accurately predicted the start of a bear market for November 2021.
Ju, despite the bearish currents in the market, remains cautiously hopeful that Bitcoin will reach new heights before the end the year. “As long as the Bitcoin price stays above $45K, it could break its all-time high again within a year, imo. Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two. If it lingers longer, the risk of a bear market grows, and recovery may be difficult if it lasts over a month,” Ju concludes.
BTC is currently trading for $56,639.
Featured image was created with DALL.E chart by TradingView.com
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Source: www.newsbtc.com
