Ki Young Ju, the CEO at CryptoQuant and an on-chain analyst, says Bitcoin (BTC) is neutral to short-term bearish for the time being.
There are two major indicators that have been useful in spotting trend reversals in the ongoing bull cycle.
First, whenever the Coinbase premium appeared, which means BTC is trading higher on Coinbase than on Binance, for example, BTC saw bullish momentum. Second, the momentum of Bitcoin strengthened when it saw large outflows from Coinbase.
In the past several days, however, neither of these two indicators have shown any staying power as the metric dipped into negative territory on Jan. 24.
When will Bitcoin market sentiment improve again?
Bitcoin will most likely find a renewed bullish rally if the premium on Coinbase consistently appears with large outflows.
The combination of these two indicators would suggest that high-net-worth individuals are accumulating Bitcoin once again. Ki explained:
“I’ll keep my bearish bias until there are significant Coinbase premium and Coinbase outflow. $BTC needs USD spot inflows from institutional investors to start the next bull run.”
The popular narrative around the recent Bitcoin rally is that high-net-worth individuals and institutional investors are scooping up BTC on every dip.
Besides the two Coinbase-related indicators, stablecoin inflows is another important metric that could spot a new rally brewing.
Ki noted that stablecoin inflows into exchanges are often a powerful on-chain signal for a rally because it shows the entry of sidelined capital into the cryptocurrency exchange market.
For instance, when stablecoin inflows spiked on Jan. 22, BTC proceeded to rally by around 6% in the next 24 hours. He said:
“This indicator is one of the powerful on-chain signals with a pretty good hit rate. You can predict an instant rise in the short term, regardless of the overall market trend. It’s the number of stablecoins deposits on all exchanges, meaning investors try to send stablecoins to exchanges to buy crypto. For example, if this value hit 80, we can assume that 80 people are trying to deposit on exchange at a single block, in 15 seconds.”
How low would BTC go?
In the foreseeable future, if Bitcoin continues to trade sideways, some traders foresee BTC dropping to as low as $27,000.
A pseudonymous trader known as “CJ” shared a potential scenario where BTC could bottom at around $26,000 to $27,000.
However, even in the worst-case scenario, analysts generally do not see the price of Bitcoin declining to the low-$20,000 area. The trader wrote:
“This channel could be the very thing that prevents a 20k re-test. Based on this chart, the sweet spot for a dip is between 23-27k.”
Although short-term on-chain indicators signal a slightly bearish outlook, they do not hint at the likelihood of a deep correction.
Bitcoin dropping back down to around $20,000, the previous all-time high, would mean a 35% drop from current levels. Such an event is unlikely, but traders should be aware of a possible black swan event such as a regulatory clampdown or a high-profile lawsuit against a major industry player.
The Cycle Started, Mike Novogratz Says – Bitcoin Boom Is Here; Jack Dorsey Boosts BTC’s Price
Mike Novogratz is one of the essential names in the crypto space which is celebrating the booming price of Bitcoin.
Check out what he had to share with his followers and Twitter fans:
Crypto wealth is approx 50bps of global wealth. That means if you don’t have at least 1/2 percent invested in crypto you are short the global benchmark. Most institutions are still at 0. As they move in, that number will go to 1 then 2 then….
The cycle has started.— Mike Novogratz (@novogratz) October 16, 2021
Someone hopped in the comments section and said this; ‘Anyone who has not yet embarked on the crypto band wagon is a simple minded idiot who knows nothing about markets, freedom or wealth creation.’
Jack Dorsey boosts the price of BTC
It’s been also revealed that Jack Dorse said that Square could build a BTC mining system – this obviously triggered a more massive price race for the king coin.
At the moment of writing this article, BTC is trading in the green and the king coin is priced at $61,118.15.
CNBC online publication just noted that Square CEO Jack Dorsey said late on Friday the company is considering jumping into BTC mining business.
Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.”
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.— jack⚡️ (@jack) October 15, 2021
Dorsey’s goal would be to make crypto mining more accessible. We suggest that you check out the complete thread that Dorsey shared on his social media account in order to learn all the available details.
Pantera Capital’s Dan Morehead: Bitcoin (BTC) Already Up 100% in This Bull Run
How big is median increase in Bitcoin (BTC) price in bullish market phases?
As Bitcoin (BTC) reclaims $62,000 level, Dan Morehead, CEO of the first-ever cryptocurrency-focused VC firm in the U.S., shares the comprehensive statistics of the last six bull runs for Bitcoin.
Bitcoin (BTC) price doubled in 87 days: Bull Run 2021
According to the latest tweet by Mr. Morehead, the Bitcoin (BTC) price witnessed a 2x increase in the first 87 days of the ongoing bullish wave.
#bitcoin at $61,000 is 2x from where we mark the start of this new bull market in July.
For perspective, the median bull cycle went up 15x over 300 days.
More thoughts on the state of the market here: https://t.co/g46sxp7Qe6 pic.twitter.com/Iy96sJvZzO— Dan Morehead (@dan_pantera) October 15, 2021
Unlike many other experts, Mr. Morehead identifies two separate “bull run” phases in 2020-2021. During the previous one, between March 16, 2020, and April 14, 2021, it took 394 days for Bitcoin (BTC) to increase its price 13x and print a new all-time high.
According to his infographic, the most impressive rally ended with a 106x increase of the orange coin’s price in 2015-2017.
That said, the median Bitcoin (BTC) price bull run lasted for 300 days and increased the “king coin’s price” by 15x.
Will Bitcoin ETF mark the top of the BTC cycle?
At the same time, according to “The Next Price Era” letter issued by Pantera Capital on Oct. 6, 2021, the hotly-anticipated approval of Bitcoin (BTC) ETFs is listed amidst the possible “sell the news” events.
Mr. Morehead noticed that the launch of CME Bitcoin Futures and Coinbase direct listing triggered painful bear markets:
Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.
As covered by U.Today previously, similar statements were made by CNBC’s Jim Cramer.
The seasoned analyst also revealed his plans to “cash out” 50% of his Ethereum (ETH) bags.
Bitcoin Will Significantly Underperform Altcoin Market As New Crypto Price Era Unfolds: Pantera Capital’s Dan Morehead
The founder and chief executive officer of Pantera Capital says that investors can expect altcoins to outperform Bitcoin (BTC) in the long term.
In a recent edition of Pantera’s Blockchain Letter, the head of the digital asset management firm outlines Dan Morehead’s key quotes from the SALT 2021 conference in New York. During the conference, Morehead said that even though his company has greatly profited from BTC, he emphasized that most future crypto gains will come from altcoin investments.ADVERTISEMENT
“My perspective is: Bitcoin has been amazing – Pantera Bitcoin Fund is up 67,000% since inception. However, I think the majority of future gains will be from tokens outside of Bitcoin. I know that sounds heretical to some people here, but that’s my professional opinion.”
Morehead compares the rise of Bitcoin and its competitors to that of the tech industry boom during the late 1990s.
“It’s like saying in 1998 that [the] majority of future tech gains would come from outside Microsoft.
At the time, Microsoft was worth $218 billion, Apple $3.5 billion, Amazon was $2.2 billion. Google and Facebook were zero – they didn’t even exist. In the years since Microsoft did great – it went up 10x. However, 80% of the tech gains in these five stocks came from outside Microsoft.
That’s the view I have here – I think BTC is going to go up a ton – like 10x. It’s a great investment…[but] I think the broader portfolio is going to outperform.”
At time of writing, BTC has a market cap of $1.156 trillion while all altcoins combined have a market cap of $1.327 trillion, according to CoinMarketCap.