Market Status Analysis: Which stage of the bull market are we in?
There are many reasons to feel excited.Original Title: 《Where are we in the cycle?》
Author: The DeFi Investor
Translation: 深潮TechFlow
In today's article, we will discuss:
What stage of the cycle are we currently in?
On-chain data analysis
What stage are we in the cycle?
If you have seen my recent X posts, you already know that I am optimistic about the crypto market in the fourth quarter.
But in this issue, I will detail what I believe is our exact position in this crypto cycle and explain why I remain optimistic about the near future.
Summary: There are many reasons to be excited.
Let's start with some crypto charts that I think are relevant.
BTC Cycle ROI is right at the typical position for this stage of the cycle.
Source: @intocryptoverse
The performance of BTC in this market cycle is very similar to the bull markets of 2016 and 2020.
Financial markets tend to be cyclical because human nature is constant. This is why the likelihood of BTC having already peaked seems low.
The past two bull markets share two common points:
The real BTC uptrend typically starts about 170-180 days after the Bitcoin Halving.
The BTC cycle peak is reached about 480 days after the Bitcoin Halving.
cryptoquant.com
It has only been 160 days since the 2024 Bitcoin Halving event.
Based on past situations, we are likely only a few weeks away from the moment BTC resumes its uptrend.
Clearly, this assumes history will repeat itself, but I don't see any significant reasons for things to be different this time.
BTC Exchange Reserve is declining at a rapid pace.
Since January 2024, over 500,000 BTC have been withdrawn from exchanges.
When large holders withdraw their tokens from exchanges, it usually means they plan to hold them for a while rather than sell them in the near term.
The chart above seems to show that large holders have accumulated a significant amount of BTC over the past few months.
If this accumulation continues, a supply squeeze will be inevitable.
Bitcoin Season is historically the first phase of every new cycle.
The infographic in the image above was created years ago but summarizes well what happened in the 2016 and 2020 cycles.
First, BTC starts to rise, and its market dominance increases.
Then, attention begins to shift to large-cap coins (such as ETH, SOL, etc.).
Finally, almost every altcoin starts to rise, regardless of its market cap or fundamentals.
Recently, BTC's market dominance has reached new multi-year highs.
This may indicate that we are still in the first phase. Historically, altseason usually begins after BTC's market dominance starts to decline. I believe we are approaching the second phase.
All the charts above and historical data from previous bull market cycles lead me to believe that BTC is likely to set new all-time highs in the fourth quarter.
So, is there a possibility of being wrong?
Let's briefly discuss the possibility of a bear market.
There are still many macro uncertainties.
If a global economic recession begins, digital currencies will be significantly affected.
However, I believe the likelihood of a recession occurring in the near term is low, as 2024 is an election year in the United States.
To give Kamala Harris a chance to win the U.S. presidential election, the Democrats will do everything possible to delay the election.
While I think a U.S. recession may begin sometime in the next 3-4 years, I believe the chances of it happening in 2024 are very small.
Therefore, I am optimistic about cryptocurrencies in the fourth quarter.
I hope our faith and patience will soon be rewarded.
On-chain Dynamics
Sui's Total Value Locked (TVL) has surpassed Polygon for the first time.
Sui is one of the fastest-growing blockchains, and it is an L1 blockchain that achieves high transaction throughput through parallel transaction execution.
The recent surge in most metrics seems to be driven by two key factors: its very strong community and its growing popularity on X.
In addition, its team has secured significant partnerships with several Web2 and Web3 giants, including Circle and TikTok's parent company.
