Investor expectations have been pretty straightforward as of late, ever since the ETF applications started rolling out.
"The SEC would approve the ETFs in January, followed by a powerful price rally that lasts until April, when the next Bitcoin halving comes.
The market might experience a slight post-halving dip, before continuing further upwards again with Bitcoin ending the year at around $125 or even higher"
However, things don't always turn out like this, especially in the madhouse the crypto market turns out to be sometimes.
In fact, IntoTheBlock thinks that the Bitcoin bull market we all expect might not even have started at all.
Let's jump into IntoTheBlock's rationale, and see what they mean:
As we mentioned earlier, IntoTheBlock thinks that all of the current Bitcoin "bull market" speculation may be one big misunderstanding, and they present some pretty compelling facts to support that claim.
Most of these facts came in the form of a thread on Twitter over the weekend, and here is the breakdown.
One good example is the issue of bitcoin inflows when it comes to Centralized Exchanges.
Centralized exchanges present one of the most straightforward ways to sell crypto. Because of this, individuals, corporations and sometimes even governments see these exchanges as the go-to platform to buy and sell their crypto.
According to IntoTheBlock, Bitcoin recorded six weeks in a row, of CEX inflows, with nearly $2B in net deposits since December.
This fact alone, contradicts everything we believe about Bitcoin's "bullishness". If everyone is buying and HODLing, Bitcoin's price should be sky high right now.
However, IntoTheBlock notes that we have seen the opposite, with about 10% shaven off the cryptocurrency's price in the past week.
"So who is selling?" IntoTheBlock asks.
Furthermore, there is the issue of Bitcoin's average holding time of transacted coins hitting an all-time high.
In essence, this metric measures how long investors hold their coins, before selling them.
IntoTheBlock notes that the average holding time of transacted Bitcoin rose steadily through 2023, hitting a record high of 4.7 years in December last year.
We can conclude from this, that the coins that were moved around on the Bitcoin network in that month, had been held by their previous owners for almost five years, on average.
This means that even these hardcore HODLers were selling and cashing in profits in December 2023, right when the crypto market was at the height of its power.
However, this does not prove that they were merely dumping.
IntoTheBlock notes that these funds may have been coming from Grayscale's Bitcoin ETF, which experienced outflows of around $450 million in less than two weeks, as investors jumped ship.
Moreover, IntoTheBlock notes that the number of addresses holding over 1,000 BTC has increased their holdings by 8% in January 2024, while those with fewer than 1k $BTC decreased their holdings in January.
This shows that the smaller fish and shrimp may have been the ones dumping their holdings, possibly due to fear, uncertainty, or doubt.
All of the facts presented above, paint a mixed picture of what the Bitcoin market is really up to, according to IntoTheBlock.
On one hand, the amount of money flowing into the CEXes to be sold, along with the high average holding time of transacted coins show that we may not even be in a bull market yet.
On the other hand, the increase in the number and the balance of the whales shows that there is a lot of buying pressure in the market, which indicates that even if we weren't in a bull market yet, we are very close to one.
However, to nail the coffin shut, IntoTheBlock also notes that the current behaviour of the market does not show any similarities with that of the previous tops like 2013 and 2017.
A good example is how the net inflows into CEXes are still much lower than what we have seen in those periods, indicating that there might still be a chance for the sellers and bears to shine.
Moreover, the balance of the short-term holders is still much lower than we have seen in both 2013 and 2017, indicating that just like the bears, the bulls also have some room to shine.
Therefore, to say that we are in a bull run already and also mean it, may come with several risks.
However, it is entirely possible that if we aren't in a bull market yet, we are likely to be in a transitional stage, where the market is still searching for a clear direction.
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.