Bitcoin Magazine Pro
Bitcoin’s Anticipated Retail Resurgence
Published
3 months agoon
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adminBitcoin’s recent price action has been a rollercoaster of highs and lows. However, even though bitcoin has set a new all-time high and had two years of a near-constant positive trajectory, we’re yet to see a consistent influx of retail investors. The potential for a surge in retail participation and the possibility of elevating the bitcoin price to unprecedented levels are prospects that many investors are anxiously anticipating. In this article, we’re going to explore when we might see these retail investors dive back into the bitcoin pool and whether their return could indeed propel BTC to even greater heights.
Active Address Growth and its Impact
To anticipate this potential retail wave, it’s important to scrutinize the trend of active address growth. Data sourced from Bitcoin Magazine Pro suggests a downward swing in the number of active network participants in recent months. The 365-day moving average (blue line), along with the 60-day (purple line) and 30-day averages (red line), tell a tale of decreased network activity. This drop takes the count of active users back to levels reminiscent of early 2019, following bitcoin’s bear cycle, when prices hovered between $3,500 to $4,000.
This decline in active network users raises eyebrows about bitcoin’s upside potential in the current cycle. Interestingly, despite bitcoin hitting a new record of roughly $74,000, there was no corresponding sustained uptick in network users, a stark departure from previous cycles.
The Necessary Inflow of New Capital
This trend could be a reflection of Bitcoin’s evolving identity. Originally a digital peer-to-peer currency, Bitcoin is increasingly seen as a store of value. As a result, fewer people are using it for everyday transactions and are instead pouring capital into bitcoin as a long-term asset.
The Bitcoin HODL Waves & Realized Cap HODL Waves shed light on this shift. These metrics group Bitcoin network users based on the duration they’ve held their coins, as well as showing their influence on the accumulation price of BTC. Recent data reveals that about 20% of bitcoin has been held for three months or less, indicating that new users are entering the market, but as we can see from the average active addresses in the above data, not using Bitcoin as frequently as before.
The impact of these new users on the realized cap (the average accumulation price of all BTC) is considerable, with over 40% of recent influence coming from users holding Bitcoin for three months or less (indicated by the warmer red/orange colors in the chart below). This suggests that users are entering the market at higher prices and are behaving in a manner consistent with previous cycles (we’re recently seen the initial early bull cycle inflows at comparable levels to previous cycles, indicated by the red box), just not as frequently as we have previously seen.
Understanding Market Forces and Retail Involvement
A look at Bitcoin’s past cycles shows that a surge in retail activity often precedes market peaks. For example, in the 2017 and 2021 bull runs, retail interest spiked around 6 months before the price peaks. The current absence of a significant increase in retail interest, as evidenced by Google Trends, suggests we’re experiencing a more measured, and more sustainable market growth.
Another key consideration is the Bitcoin Open Interest chart, which measures the total value of open bitcoin futures contracts. Since late 2022, this metric hasn’t shown a significant increase; in fact, we’ve seen a steady decline since the bear cycle lows (indicated by the declining red line in the chart below). Revealing that investors are now preferring to trade actual bitcoin rather than merely participating in derivatives trading. This indicates a shift in narrative where investors are more interested in holding bitcoin for the long haul rather than chasing short-term speculative gains.
Conclusion
Given current trends, the lack of a retail frenzy could be seen as a positive sign for the market’s long-term prospects. As bitcoin approaches new record highs, keeping a close eye on the arrival of retail investors will be essential. If retail investors start entering the market in large numbers, will they fall back into old habits of pure FOMO buying, or will they continue to favor long-term holding?
In short, despite a fall in Bitcoin’s active user metrics, the market shows signs of stability and long-term investment. The absence of immediate retail interest might seem bearish, but it’s more likely to be bullish as it indicates a more measured and sustainable growth trajectory.
For a more in-depth look into this topic, check out a recent YouTube video here:
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Bitcoin Magazine Pro
The Bitcoin Report: Key Trends, Insights, and Bitcoin Price Forecast
Published
7 hours agoon
November 7, 2024By
adminDive into the full October 2024 Bitcoin Report for the latest insights and analysis. Click here to read the full report: Read the Report
The October 2024 edition of The Bitcoin Report is packed with expert insights and bullish price forecasts as Bitcoin continues to carve its place as the leading decentralized digital asset. This month, we focus on several key topics: Bitcoin’s decreasing exchange balances, ETF inflows surging past $5 billion, and bullish price targets that could redefine Bitcoin’s value over the next quarter. Featured contributions come from some of the biggest names in the Bitcoin space, including Caitlin Long, who provides an industry insight into Bitcoin’s adoption cycle, and Tone Vays, whose exclusive price forecast gives reasons for optimism as Bitcoin heads toward potential new highs.
Report Highlights:
- Bitcoin On-Chain Analysis: This section examines how decreasing exchange balances and growing self-custody reflect an increase in long-term holding sentiment. With Bitcoin exchange balances hitting new lows, it signals rising confidence among investors that are choosing to take control of their own assets rather than leave them on exchanges.
- Bitcoin ETFs: October saw over $5.4 billion in inflows to Bitcoin ETFs, with BlackRock’s IBIT leading the market. This record-setting month underscores the growing acceptance of Bitcoin in mainstream financial markets, bolstered by the approval of options trading on Bitcoin ETFs. Dr. Michael Tabone, Economist & Professor at the University of the Cumberlands, provides his take on how this surge could play out in the coming months.
- Bitcoin Mining Update: Russia and China have quietly expanded their influence in global mining, with the US still holding the largest hashrate share. Lukas Pfeiffer of Crypto Oxygen elaborates on how these shifts may reshape global mining dynamics and what it means for the future.
- Price Forecast by Tone Vays: Bitcoin analyst Tone Vays remains incredibly optimistic about Bitcoin’s future price, citing multiple technical indicators and historical patterns. The report details potential price targets ranging from $102,000 to $140,000 by mid-2025, supported by bullish technical analysis such as Fibonacci extensions and a classic cup and handle chart pattern.
- Industry Insights from Caitlin Long: Caitlin Long, Founder & CEO of Custodia Bank, provides her perspective on Bitcoin’s adoption trends and how the broader economic climate continues to favor decentralized assets. According to Long, Bitcoin’s fundamentals are strong, and a bull market could be on the horizon following the 2024 U.S. presidential election.
The report also contains valuable contributions from other experts in the Bitcoin ecosystem, including Philip Swift on Bitcoin derivatives, Lucas Betschart on regulatory changes, Pete Rizzo on Bitcoin history, Pascal Hügli with on-chain analysis, Dr. Michael Tabone on Bitcoin stocks and ETFs, Joël Kai Lenz on Bitcoin adoption, and Patrick Heusser on technical analysis. These contributions provide a well-rounded look at Bitcoin’s current state and its future potential.
Get the full insights, charts, and analysis by accessing the complete report now. We invite your organization to explore potential sponsorship or joint-publication opportunities for future editions by reaching out to Mark Mason at mark.mason@btcmedia.org. Let’s orange-pill the world together!
Download and Share: This report is freely available to all. Download, share, and help drive the conversation on Bitcoin adoption and education. Use the hashtag #TheBitcoinReport in your posts to join the movement.
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Bitcoin Magazine Pro
Mathematically Forecasting Peak Bitcoin Price For The Next Bull Cycle
Published
6 days agoon
November 2, 2024By
adminWith years of historical data, we can observe the patterns from past bull cycles to become increasingly capable of making predictions about our current cycle. In this analysis, we take a deep dive into when the next Bitcoin peak may occur and at what price level.
The Pi Cycle
The Pi Cycle Top Indicator is one of our most popular tools for analyzing Bitcoin’s cycles. This indicator monitors the 111-day and 350-day (multiplied by 2) moving averages, and when these two lines cross, it has historically been a reliable sign of Bitcoin reaching a cycle peak, typically within just a few days. After multiple months of these two levels drifting apart due to the sideways price action, we’ve just begun to see the 111-day trending back up again to begin closing the gap.
We can measure the difference between the two averages to better define Bitcoin’s position within bull and bear cycles with the Pi Cycle Top & Bottom Indicator. This oscillator trending up again hints that Bitcoin’s next bull run may be just around the corner, with parallels to previous cycles seen in 2016 and 2020.
Previous Bitcoin Cycles
Historically, Bitcoin’s bull cycles exhibit similar phases: initial rapid growth, a cooling-off period, a second peak, and finally, a significant retracement followed by a new surge.
2016 Cycle: This cycle saw a first peak, a dip, a second peak, and then a full-blown bull market. It’s very similar to the trend we’re currently seeing. Bitcoin’s price reached new highs after these two retracements.
2020-2021 Cycle: The pattern was slightly less pronounced, but a similar trajectory was observed. Bitcoin’s price peaked twice, once during the initial surge and again at the peak of the bull run as BTC was reaching an all-time.
Using the Bitcoin Magazine Pro API, we can simulate different growth scenarios based on past cycles. Since the Pi Cycle Top and Bottom oscillator recently turned upward we can overlay the rate of change in the oscillator from the previous cycles to see potential route this cycle.
If the 2021 cycle repeats, the 111-day and 350-day moving averages may cross around June 29, 2025, signaling a potential Bitcoin peak. If the 2017 cycle is mirrored, the moving averages might not cross until January 28, 2026, suggesting a later peak.
Price Projections
Using these dates, we can also attempt to estimate potential price levels. Historically, Bitcoin’s price exceeded the moving averages significantly at its peak. During the 2017 bull run, Bitcoin’s price was three times the value of these moving averages at the peak. However, as the market matures, we’ve seen diminishing returns in each cycle, meaning Bitcoin’s price might not increase as dramatically compared to its moving averages as it has historically.
If Bitcoin follows a pattern similar to the 2021 cycle, with an increase of about 40% above its moving averages, this would place Bitcoin’s peak at approximately $339,000. Assuming diminishing returns, Bitcoin’s price might only rise about 20% above the moving averages. In this case, the peak price would be closer to $200,000 by mid-2025.
Similarly, if the 2017 extended cycle repeats with diminishing returns, Bitcoin could peak at $466,000 in early 2026, while a more moderate increase might result in a peak price of around $388,000. Although it’s unlikely Bitcoin will hit one million dollars in this cycle, these more tempered projections could still represent substantial gains.
Conclusion
While these projections use well-established data, they’re not guarantees. Every cycle has its unique dynamics influenced by economic conditions, investor sentiment, and regulatory changes. Diminishing returns and potentially even lengthening cycles are likely, reflecting the maturation of Bitcoin’s market.
As Bitcoin’s bull cycle continues to develop, these predictive tools could provide increasingly accurate insights, particularly as the data evolves. However, analysis such as this provides potential outcomes to assist in your risk management and prepare for every outcome.
For a more in-depth look into this topic, check out a recent YouTube video here: Mathematically Predicting The Next Bitcoin All Time High
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Bitcoin Magazine Pro
Is Bitcoin Repeating Previous Bull Cycles?
Published
2 weeks agoon
October 26, 2024By
adminBitcoin’s price cycles have long been a source of intrigue for investors and analysts alike. We can gain insights into potential price movements by comparing current trends to previous cycles, especially with Bitcoin seemingly coming to an end of its consolidation period, many wonder if the next leg up is around the corner.
Comparing Bitcoin Cycles
To begin, it’s crucial to look at how Bitcoin has performed since hitting its recent cycle low. As we examine the data, a clear picture begins to form: Bitcoin’s current price action (black line) is showing patterns similar to previous bull cycles. Although it has been a choppy consolidation period, where the price has been relatively stagnant, there are key similarities when we compare this cycle to those in 2015-2018 (purple line) and 2018-2022 (blue line).
Where we are today, in terms of percentage gains, is comparable to both the 2018 and 2015 cycles. However, this comparison only scratches the surface. Price action alone doesn’t tell the full story, so we need to dive deeper into investor behavior and other metrics that shape the Bitcoin market.
Investor Behavior
One key metric that gives us insight into investor behavior is the MVRV Z-Score. This ratio compares Bitcoin’s current market price to its “realized price” (or cost basis), which represents the average price at which all Bitcoin on the network was accumulated. The Z-Score then just standardizes the raw MVRV data for BTC volatility to exclude extreme outliers.
Analyzing metrics such as this one, as opposed to purely focusing on price actions, will allow us to see patterns and similarities in our current cycle to previous ones, not just in dollar movements but also in investor habits and sentiment.
Correlating Movements
To better understand how the current cycle aligns with previous ones, we turn to the data from Bitcoin Magazine Pro, which offers in-depth insights through its API. Excluding our Genesis cycle, as there is little correlation and isolating the price and MVRV data from Bitcoin’s lowest closing prices to its highest points in our current and previous three cycles, we can see clear correlations.
2011 to 2013 Cycle: This cycle, characterized by its double peak, shows a strong 87% correlation with the current price action. The MVRV ratio also shows a high 82% correlation, meaning that not only is Bitcoin’s price behaving similarly, but so is investor behavior in terms of buying and selling.
2015 to 2017 Cycle: This cycle is actually the closest in terms of price action, boasting an 89% correlation with our current cycle. However, the MVRV ratio is slightly lower, suggesting that while prices are following similar paths, investor behavior might be slightly different.
2018 to 2021 Cycle: This most recent cycle, while positive, has the lowest correlation to current trends, indicating that the market may not be following the same patterns it did just a few years ago.
Are We in for Another Double Peak?
The strong correlation with the 2011-2013 cycle is particularly noteworthy. During that period, Bitcoin experienced a double peak, where the price surged to new all-time highs twice before entering a prolonged bear market. If Bitcoin follows this pattern, we could be on the verge of significant price movements in the coming weeks. After overlaying the price action fractal from this period over our current cycle and standardizing the returns, the similarities are instantly noticeable.
In both cases, Bitcoin had a rapid run-up to a new high, followed by a long, choppy period of consolidation. If history repeats itself, we could see a massive price rally soon, potentially to around $140,000 before the end of the year when accounting for diminishing returns.
Patterns In Investor Behavior
Another valuable metric to examine is the Value Days Destroyed (VDD). This metric weights BTC movements by the amount being moved and the time since it was last transferred and multiplies this value by the price to offer insights into long-term investors’ behavior, specifically profit-taking.
In the current cycle, VDD has shown an initial spike similar to the red spikes we saw during the 2013 double peak. This run-up as BTC ran to a new all-time high earlier this year before a sustained consolidation period could see us reaching new highs soon again if this double peak cycle pattern continues.
A More Realistic Scenario
As Bitcoin has grown and matured as an asset, we’ve seen extended cycles and diminishing returns in our two most recent cycles compared to our initial two. Therefore, it’s probably more likely that BTC follows the cycle in which we’re seeing the strongest correlation in price action.
Figure 6: Overlaying a fractal of the 2017 cycle on our current price action.
If Bitcoin follows the 2015-2017 pattern, we could still see new all-time highs before the end of 2024, but the rally would likely be slower and more sustainable. This scenario predicts a price target of around $90,000 to $100,000 by early 2025. After that, we could see continuous growth throughout the year, with a potential market peak in late 2025, although a peak of $1.2 million if we follow this pattern exactly may be optimistic!
Conclusion
Historical data suggests we’re approaching a critical turning point. Whether we follow the explosive double-peak cycle from 2011-2013 or the slower but steady rise of 2015-2017, the outlook for Bitcoin remains bullish. Monitoring key metrics like the MVRV ratio and Value Days Destroyed will provide further clues as to where the market is headed, and comparing correlations with our previous cycles will give us better insights into what may be coming.
With Bitcoin poised for a breakout, whether in the next few weeks or in 2025, if BTC even remotely follows the patterns of any of our previous cycles, investors should prepare for significant price action and potential new all-time highs sooner rather than later.
For a more in-depth look into this topic, check out a recent YouTube video here: Comparing Bitcoin Bull Runs: Which Cycle Are We Following
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