Grayscale report argues we're not at the beginning, but rather in the middle of a Bitcoin bull run based on historical patterns and current metrics.
Historically, Bitcoin peaks 8-11 months after halvings, suggesting the recent ATH might not be the full bull run peak.
As Bitcoin rises, investors often move profits to altcoins, so dominance is a factor in broader market rallies.
Grayscale calls the current stage the "fifth inning" of the bull run, marked by rising Bitcoin inflows, stablecoin supply on exchanges, and decreasing Bitcoin on exchanges (indicating less selling).
Grayscale suggests Bitcoin may be clear of flash crashes in the near term, but the bull run's overall length is uncertain.
The average investor expects an incoming bull run on Bitcoin, especially after the cryptocurrency broke the last cycle's high less than a month before the next halving.
However, according to a recent report from Grayscale when we look at Bitcoin through a combination of fundamental and technical factors, we might already be in the middle of said bull run, rather than on the verge of one.
Here are all the details to support this claim, as well as everything you should know about Bitcoin's current trajectory.
The report from Grayscale starts with a bit of history.
Historically, at the start of crypto bull runs, certain patterns emerge, telling us where we are in the general timing of things.
Bitcoin halvings and bull runs
One thing to note about these trends is how Bitcoin typically hits its peak around 8-11 months after halvings.
To understand what is currently going on, we need to take a look at the idea of dominance.
According to Grayscale’s report, Bitcoin’s dominance is one of the key contributing factors to broader market rallies.
In detail, as the price of Bitcoin rises, investors often take profits from the flagship cryptocurrency and rotate them into the altcoins in a bid to make higher returns.
During the 2021-2022 bull run, this trend was particularly obvious with Bitcoin’s rallies being quickly followed by an altcoin season.
Grayscale’s report goes further to break down the current market cycle into two main phases:
The beginning phase is referred to as the “fifth inning.”
This phase represents the middle of the bull run, when several unique catalysts come into play, setting the tone for the later stages.
Some of these unique catalysts include the rising spot Bitcoin inflows, pushing the price of the cryptocurrency further upwards.
Others include the rising supply of stablecoins on exchanges (illustrated below), and the decreasing Bitcoin balance on exchanges, indicating that investors are less likely to sell.
The stablecoin supply change
Moreover, data from Glassnode shows a massive decrease in the amount of Bitcoin held on exchanges, with a 7% decrease since May 2023.
Grayscale says that assessing these changes in the market shows that we are currently in the “fifth inning” of the bull run.
While the report mentions that it might be hard to predict how long this “fifth inning” is going to last, the current indicators show that Bitcoin might be in the clear of any flash crashes.
Moreover, the report also states that “As of mid-March 2024, with a NUPL at approximately 60% and historical peaks occurring at profit ratios above 70%, it appears we may be approaching a cycle high on this measure.”
Bitcoin’s NUPL ratio
This means that a cycle peak might come sooner than we expect (considering how we just saw a first-ever pre-halving ATH breakout)
Overall, the crypto market’s future looks promising, with Bitcoin leading the charge. And as we progress through the bull run, investors and traders alike keep their fingers crossed, as they await what Bitcoin has in store.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.