After a significant multi-week decline that saw Bitcoin drop from over $100,000 to below $80,000, recent price movements have prompted traders to question whether the Bitcoin bull market has genuinely resumed or if this is simply a bear market rally ahead of the next macro upward movement.
Is Bitcoin at a Local Bottom or Just Pausing in the Bull Market?
The recent correction in Bitcoin’s price was severe enough to shake investor confidence but not deep enough to disrupt the broader macro trend. It appears that a local bottom was established around the $76K to $77K range, and various trusted metrics are starting to reinforce these local lows, indicating potential for further price increases.
The Net Unrealized Profit and Loss (NUPL) serves as one of the most dependable sentiment indicators throughout Bitcoin’s cycles. As prices fell, NUPL entered the “Anxiety” phase, but the subsequent rebound has brought it back into the “Belief” zone—a pivotal sentiment shift historically observed at macro higher lows.
The Value Days Destroyed (VDD) Multiple assesses Bitcoin transactions by both coin age and transaction size, comparing current values to historical yearly averages to gauge long-term holder activity. Present readings have fallen to lower levels, suggesting that significant, older coins remain unmoved. This signals strong conviction from informed investors. Similar behavioral patterns preceded major price surges during the 2016/17 and 2020/21 bull markets.
Long-Term Bitcoin Holders Fueling the Bull Market
We are observing a rise in Long-Term Holder Supply. After some profit-taking above $100K, these long-term participants are now re-accumulating at lower price points. Historically, such accumulation phases have laid the groundwork for supply squeezes and subsequent explosive price movements.
Bitcoin Hash Ribbons Indicate Bull Market Crossover
The Hash Ribbons Indicator has recently executed a bullish crossover, with the short-term hash rate surpassing the longer-term trend. Historically, this signal has correlated with price bottoms and trend reversals. Since miner behavior typically reflects profit expectations, this crossover implies that miners are now optimistic about future prices.
Connection Between Bitcoin Bull Market and Stock Trends
Despite positive on-chain data, Bitcoin continues to be influenced by macro liquidity patterns and equity markets, especially the S&P 500. As long as this correlation persists, Bitcoin’s performance will be affected by global monetary policies, risk sentiment, and liquidity movements. While expectations of interest rate cuts have supported a rally in risk assets, any sudden shifts could bring renewed volatility to Bitcoin’s price.
Prospects for the Bitcoin Bull Market
From a data-driven viewpoint, Bitcoin appears increasingly well-situated for a prolonged and robust bull cycle. On-chain indicators present a strong case for the resilience of the Bitcoin bull market. The NUPL metric has shifted from “Anxiety” during the downturn to the “Belief” phase after the recovery, a transition often witnessed at macro higher lows. Additionally, the VDD Multiple has adjusted to levels indicating strong conviction among long-term holders, reflecting similar patterns prior to Bitcoin’s rallies in 2016/17 and 2020/21. These indicators suggest structural strength, further supported by long-term investors actively accumulating Bitcoin at prices below $80,000.
Additionally, the recent bullish crossover in the Hash Ribbons indicator signifies increasing miner confidence in Bitcoin’s profitability, a historically reliable sign of reversing trends. This phase of accumulation hints that the Bitcoin bull market may be on the verge of a supply squeeze, a situation that often ignites rapid price increases. Collectively, these indicators emphasize resilience rather than weakness, as long-term holders capitalize on the recent price dip. However, this strength relies on more than just on-chain metrics; external influences will be pivotal for future developments.
Nonetheless, caution is warranted regarding macroeconomic conditions, as the Bitcoin bull market operates within a larger context. Bull markets require time to build momentum and typically need consistent accumulation and favorable conditions to jumpstart the next upward move. While the local bottom between $76K and $77K appears stable, the upcoming trajectory will likely not consist of vertical surges of high enthusiasm. Bitcoin’s connection to the S&P 500 and worldwide liquidity trends suggests that volatility may arise from changes in monetary policy or shifts in risk sentiment.
For instance, while expectations of interest rate cuts have enhanced the performance of risk assets, any abrupt reversal—potentially caused by inflation spikes or geopolitical tensions—could challenge Bitcoin’s stability. Therefore, even with strong on-chain indicators pointing to a healthy setup, the next chapter in the Bitcoin bull market will likely unfold gradually. Traders anticipating a surge back to six-figure prices will need to exercise patience as market conditions evolve.
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Disclaimer: This article is intended for informational purposes only and should not be interpreted as financial advice. Always conduct your own research before making any investment choices.
