Are We At The Early Stages Of A Bitcoin Bull Market? Bitfinex Analysts Reveal

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While the glob­al cryp­to mar­ket has split, with some parts, such as XRP mov­ing in an upward trend and anoth­er part, such as Bit­coin mov­ing in a down­ward trend, Bitfinex ana­lysts have sug­gest­ed the cur­rent down­trend on Bit­coin may not just last for a long anymore.

Accord­ing to Bitfinex’s alpha report this week, Bit­coin has record­ed bull­ish achieve­ments over the past week. This has indi­cat­ed a pos­si­ble upcom­ing round of anoth­er ral­ly from the top cryp­to, or in Bitfinex ana­lysts’ words, this could mean we may be in the “ear­ly stages of a Bit­coin bull market.”

Bitcoin Bull Market Approaching?

In Bitfinex’s alpha report, the exchange’s ana­lysts point­ed out sev­er­al notable points Bit­coin (BTC) has achieved in the past week, which may result in bull­ish moves from the asset soon­er or lat­er. Accord­ing to ana­lysts, Bit­coin is begin­ning to see new mar­ket participants. 

Over the past weeks, the asset’s deriv­a­tives trad­ing vol­ume has surged faster than the spot trad­ing vol­ume, there­by dri­ving its volatil­i­ty. Per the report, Bitcoin’s 7‑day mov­ing aver­age spot trad­ing vol­ume has only surged by rough­ly $24 billion.

This is way low­er than the deriv­a­tives mar­ket, which has seen Bit­coin trad­ing vol­ume on futures across var­i­ous exchanges near $1 tril­lion. Though the amount record­ed in the spot trad­ing vol­ume is the high­est ever in Bitcoin’s his­to­ry, it’s nowhere close to the asset’s deriv­a­tives trad­ing vol­ume. The ana­lysts noted, 

“The BTC Long-term Hold­er (LTH) Spent Out­put Prof­it Ratio (SOPR) is now return­ing to a lev­el greater than one, on mul­ti­ple time­frames, indi­cat­ing that coins are being moved at a prof­it. The behav­ior of long-term Bit­coin hold­ers sell­ing their coins dur­ing cur­rent mar­ket con­di­tions is con­sis­tent with pre­vi­ous bear mar­ket trends, which is a pos­i­tive sig­nal for the market.”

Notably, the rise in Bitcoin’s spot trad­ing vol­ume can be attrib­uted to the US bank cri­sis, which caused many tra­di­tion­al bankers to seek Bit­coin as an alter­na­tive store of value. 

BTC’s Option Volume Surpasses $10 Billion

Fur­ther­more, Bitcoin’s option vol­ume hasn’t been left out of the equa­tion, as it has also been peak­ing in recent weeks, accord­ing to Bitfinex analysts.

In the past weeks, Bit­coin options’ open inter­est has spiked to around $12.14 bil­lion. The report sug­gests this means insti­tu­tion­al investors are active­ly par­tic­i­pat­ing in the Bit­coin mar­ket, indi­cat­ing the ear­ly stages of a bull market.

Accord­ing to the ana­lysts, although the increase in vol­ume may be quite excit­ing for investors, it cre­ates more risk as it increas­es volatil­i­ty. In addi­tion, over the past year, Bitcoin’s last active sup­ply has increased as opposed to the asset’s sup­ply of long-term hold­ers which has plum­met­ed. The ana­lysts noted,

“The BTC Long-term Hold­er (LTH) Spent Out­put Prof­it Ratio (SOPR) is now return­ing to a lev­el greater than one, on mul­ti­ple time­frames, indi­cat­ing that coins are being moved at a prof­it. The behav­ior of long-term Bit­coin hold­ers sell­ing their coins dur­ing cur­rent mar­ket con­di­tions is con­sis­tent with pre­vi­ous bear mar­ket trends, which is a pos­i­tive sig­nal for the market.”

Mean­while, over the past 7 days, BTC has been in the red. The asset has fall­en from a high of $28,783 on March 22 to trade below $27,000. This plum­met comes after Fed­er­al Reserve Chair­man Jerome Pow­ell announced the inter­est rate spike last week.

Bitcoin price chart on TradingView
Bit­coin price is mov­ing side­ways on the 4‑hour chart. Source: BTC/USDT on TradingView.com

At the time of writ­ing, Bit­coin is cur­rent­ly in a down­trend along­side some parts of the cryp­to mar­ket. The asset is down by near­ly 1% in the last 24 hours with a trad­ing price of $26,837. In con­trast, its 24-hour trad­ing vol­ume sits at $16.5 bil­lion, down by 6.7% over the same period.

Fea­tured image from Shut­ter­stock, Chart from TradingView

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