This round of bull market:
1. The rise is slow, without showing the profit effect of the previous bull market;
2. Poor liquidity, most high market value altcoins other than BTC have not reached new highs;
3. Lack of traffic, social media attention is much lower than in the past bull markets;
Systematically speaking about these 3 points:
1. Is this bull market rising slower than previous bull markets?
Is it a technical issue to judge whether this bull market is rising fast or slow? For the momentum of price increases, it is not simply about the speed of change, but about its sustainability;
For example, if a bull market takes one year to complete, if this bull market fluctuates at the lows for the first 11 months of the year and then rises by 300% in the last month before peaking and entering a bear market, would you call this a bull market?
Although the last month rose very fast, this kind of market cannot represent sustained demand in the market and can only be seen as manipulation by the main players, more common in low market value altcoins, the purpose of such a bull market is only to raise prices for selling;
So for BTC, the bull market we need to see is a long-term process with continuous buying pressure and rising prices, corresponding to sustained demand, indicating that people are really engaging in the process of buying, holding, and long-term holding;
We can analyze the price increase speed of each bull market from 3 dimensions;
They are: the duration of the bull market, the increase brought by the bull market, and the momentum in the bull market process;
As shown in the figure:
In order to make a fair comparison with the current bull market, I have used the same structural interval to calculate the average daily increase in price% for each bull market;
The corresponding interval is the early stage of each bull market, from the lowest point to when the price just breaks through the new high and fluctuates near the previous historical high;
By dividing the price increase during this period by the number of days, it can be seen that the early trend stages of the most recent 3 bull markets have indeed seen a gradual decline in the rate of increase, with average daily increases of 1.10%, 0.71%, and 0.65% respectively;
In other words, even if BTC immediately breaks through the new high in this bull market, the rate of increase in the early stage of this bull market will always be lower than the previous two bull markets, not to mention that if BTC continues to fluctuate at present, this 0.65% figure will continue to decrease over time;
In this regard, this round of bull market is indeed rising slowly.
Next, let’s look at the price momentum:
As shown in the figures below, the following 3 charts correspond to the performance of BTC price after breaking through the new high in 2017, 2020, and 2024 on the ASR-VC trend indicator:
March 2017
December 2020
March 2024
At first glance, there seems to be an obvious difference;
After the prices broke the historical new high for the first two times, there were varying degrees of deep retracements, but one common feature of these retracements is that they did not break the trend strength of the original upward channel, the green midline in the chart always remained upward. However, in the current market, the green midline of the daily chart channel appeared to be almost flat, a situation never seen before in history;
On the other hand, it is worth noting that after the first two prices went through deep retracements, they successfully broke through the historical high on the second or third attempt, leading to a new strong bullish market. However, the current situation is that there have been multiple tests in a row, but no strong bullish market has emerged;
Conclusion: From this perspective, the early trend momentum of this bull market we are currently experiencing is far inferior to the previous two bull markets.
Although this does not mean that this round of bull market may have peaked, from the perspective of the overall structure of a bull market, the foundation of this round of bull market has not been laid well, the demand is not sustained enough, which is why it has been fluctuating at the previous high level for so long;
So, what are the reasons for the weak foundation?
Next, let’s compare from the perspective of liquidity!
2. Is the overall liquidity of this round of bull market worse than in previous bull markets?
Although the overall liquidity level cannot absolutely reflect the rise and fall of prices, the liquidity level can determine the upper limit of the price increase;
Observing the overall liquidity level of the cryptocurrency market is mainly done through two aspects: on-chain liquidity and off-chain liquidity;
On-chain liquidity generally refers to assets that have been exchanged for stablecoins or cryptocurrencies through fiat currency, reflected in the chart as the total market value of stablecoins;
Off-chain liquidity generally refers to global liquidity, more specifically, it can be represented by USD net liquidity, reflected in the chart as the assets and liabilities of the Federal Reserve minus a series of USD financial accounts;
First, let’s look at on-chain liquidity, which is the performance of USDT’s market value during the past two bull markets. Since USDC and DAI appeared later, let’s start by simply looking at USDT;
As shown in the figure, to match the market rhythm where BTC price is ready to break through the previous high at any time, we compare the USDT market value levels of the last bull market at the same time. They are the USDT market value at the historical high and the USDT market value level just before the current bull market is about to break the historical new high;
It can be seen that before the last bull market completely broke through the $20,000 mark, the market value of USDT had increased by $18.7 billion compared to the market value level at the peak of the 2017 bull market, in other words, when the price returned to the same position, USDT had $18.7 billion more than before;
This additional liquidity of $18.7 billion was the foundation laid in the early stage of the last bull market. Considering that BTC’s price is different from before, we also need to pay attention to the increase in USDT market value during this period. It can be seen that before the last bull market completely broke through the historical new high, the market value of USDT had already increased by 1680%!
Now let’s look at the current bull market, under the same conditions, the market value of USDT has increased by $38.5 billion, but the increase is only 52.16%. Note, although the total market value is indeed higher than the last bull market, the price of BTC is completely different now;
In other words, because the historical high of BTC is different, the required liquidity for the breakthrough will inevitably be different;
Let’s simply calculate the price ratio:
$69,000 / $20,000 = 3.45
187 billion x 3.45 = 645 billion
In other words, if the current bull market wants to achieve the same breakthrough trend as the last bull market, we need USDT’s market value to be $645 billion higher than the peak level of the last bull market;
In other words, the additional $38.5 billion in the market right now is not enough, the overall liquidity of this round of bull market is also insufficient compared to the last bull market;
You might say, “If you don’t count other stablecoins, isn’t that being dishonest?”
Alright, let’s calculate the performance of the three major stablecoins USDT+USDC+DAI and then look at it again:
As shown in the figure, I have not only included USDC and DAI, but also added the net inflow of BTC spot ETF, it can be seen that the on-chain liquidity of the current bull market has indeed increased significantly, reaching $50.9 billion;
While the increase in on-chain liquidity before the last bull market broke through completely reached $22 billion;
If we compare the last bull market using the same proportion:
$22 billion x 3.45 = $75.9 billion
And the on-chain liquidity accumulation of this bull market is only $50.9 billion;
$75.9 billion – $50.9 billion = $25 billion
In other words, for this round of bull market to replicate the trend of the last bull market, breaking through the previous high after fluctuating for a few weeks, we need at least an additional $25 billion;
In this case, the current market’s additional $385 billion is not enough, this round of bull market needs more liquidity to achieve the breakthrough like the last bull market.0 billion US dollars of incremental liquidity; It is obvious that it is because of the lack of this 250 billion, that the current bull market has been oscillating near the previous high for a whole quarter, half-dead and half-alive! In other words, the current bull market’s liquidity accumulation is indeed insufficient! But the question arises, if this 250 is missing, will it be impossible to break through? Personally, I don’t think so, the key lies in whether liquidity can continue to increase. That is to say, if in the next 3 months, during which there may still be fluctuations, the liquidity increment brought by “stable coin + ETF + Hong Kong ETF” gradually reaches a level of over 20 billion, then we can smoothly break through the historical high and get away from this nauseating interval. However, the current situation is indeed not optimistic, because the increase in stable coins has stagnated, and whether the net inflow of ETFs can continue after a brief surge in a week is still unknown. The chart below shows the trend of stable coin market value and the weekly net inflow level of ETFs in the last three months: [img] It can be seen that the total market value growth of stable coins has clearly stagnated, and it is likely to start choosing a direction later. If the total market value remains flat, it is good, but the worst is that if the total market value of stable coins starts to shrink and flow out, it will pose a great threat to this bull market. At the same time, due to the lack of new liquidity in stable coins, but the net inflow of ETFs has started to recover in the past month, which has led to a gradual rebound in the price of BTC when the total market value of stable coins has not changed significantly. You may wonder why BTC enters an extremely low-volume oscillating trend every weekend recently. The chart above explains the reason for this phenomenon. Because the on-exchange stable coin funds have completed the game, the price of BTC is more easily influenced by ETFs, so liquidity will only be restored during the opening of the US stock market. Therefore, the most important thing to pay attention to now is whether the total market value of stable coins can move in a new direction. If it goes up, it must be due to some long-term positive macro data. BTC will be able to officially break through the current interval with gradually sufficient additional liquidity. If it goes down, it will inevitably lead to a longer period of oscillation and correction. In other words, currently, BTC’s progress is too fast, and it has come to the BOSS (historical high) but found that it cannot be defeated. It must recharge 250 billion US dollars to enhance its combat effectiveness. BTC, unwilling to give up, chooses to fight and level up at the BOSS gate until it has recharged enough amount to launch the final challenge. Conclusion: This bull market is indeed different from the previous bull markets. The previous stage progressed too quickly, resulting in the need to exchange time for space now. If the current interval can be maintained for a sufficient period of time and liquidity continues to increase, then it could still break through in the end. If it accidentally falls below the interval and liquidity starts to shrink and flow out, the bull market is likely to end prematurely. Since macro issues have been mentioned, let’s talk about off-exchange liquidity next, that is, net liquidity in US dollars. Because this part involves too many macro contents, I can only make a simple comparison, as shown in the figure: [img] We use a comparison method similar to on-exchange liquidity. It can be seen that when the last bull market broke through the historical high, the net liquidity of US dollars in the external environment had increased by 1,433 billion US dollars, reaching an increase of 33.25%. However, in the early stages of this bull market, there was not only no increase in external net liquidity in US dollars, but also a decrease of 857.1 billion US dollars, a shrinkage of 12.22%. This seems to explain why the current bull market’s internal liquidity accumulation is far less than that of the previous bull market. Obviously, the external environment is not a state of abundant liquidity. But even so, if you carefully look at the blue line of net liquidity in US dollars, the overall performance in the past year has been a slow uptrend. This means that although the overall liquidity is insufficient, it has been slowly increasing in the past year. BTC has still shown a brief new high in such a harsh external environment. To be honest, if the ratio of liquidity flowing from US dollars to BTC in the last bull market was only 1.5% (220/14,330), then the ratio of liquidity flow in this bull market might have reached 8.9% (509/5,692)! This represents a new level of trust and favorability of traditional capital towards BTC! From this perspective, this bull market is indeed different from the previous bull markets. The overall environment is very poor, the whole class did not do well, but at least BTC can still rank in the top 5, especially when Nvidia is ranked first in the class, BTC’s performance is already very good! The discussion on liquidity ends here. There is one more point to consider regarding media attention: Is the current bull market less focused compared to previous bull markets? To cut to the chase, the answer is yes! For professionals or traders in the cryptocurrency industry, it seems that BTC has been the global focus in the past two years. However, the data reveals a disappointing reality. As shown in the figure, this is the video views of all BTC-related channels on YouTube in the past 5 years. You can clearly see that the highlight moments of BTC were during the 2021 bull market, but the current bull market, whether in terms of attention or topic popularity, is not as high as before! [img] A sad fact: when BTC broke the historical high of 69,000, the heat on YouTube was not as high as when FTX went bankrupt… However, if we compare the data with when the price broke through the historical high, it is much better now, indicating that if the future price of BTC can continue to show a strong trend and once again break through the $100,000 mark, these long-dormant retail investors will come back! Conclusion: From the perspective of social media, this bull market is not much different from the previous bull markets. BTC has achieved normalization on social media, especially in the gradually stock market-like market now, the attention of the majority of retail investors is far less important than it was in the past bull market. Well~ This is all about the question of whether this bull market is more complex than previous bull markets. It took about 12 hours to write the full text, and I conducted repeated research during the writing process, especially in the area of on-exchange liquidity. I originally wrote a lot about the comparison logic, found that there was a problem, so I had to delete everything and recalculate. At one point, I wanted to give up… But I really enjoyed the process of researching and drawing. After finishing this article, I gained a lot of valuable information from the research process, so I am very satisfied! Tags 2023 market trend DAI USDC USDT Bitcoin liquidity bull market Source link: https://x.com/CryptoPainter_X/status/1799949686079627334 Disclaimer: The content of this article represents the author’s views and does not constitute investment advice Original link: https://www.bitpush.news/articles/6860635 Related news Arthur Hayes: Global central bank rate cuts are about to start, and the explosive growth of the encrypted bull market is imminent AI face-swapping, plugin traps, OKX, Binance users lose tens of millions, are exchanges really safe? Fidelity: Investors should consider adding a small amount of BTC to their long-term investment portfolios [Bitpush Daily Market Dynamics] Spot Bitcoin ETF daily volume hits a record high, will test ATH this week? Tokenized Assets – An Overview of RWA Development in 2024