Five Data Categories Reveal the Crypto Bull Market Launched in 2023 — What Comes Next?
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Five Data Categories Reveal the Crypto Bull Market Launched in 2023 — What Comes Next?
All investor groups are accumulating Bitcoin.
Navigating Web3 tides with focused insightsAuthor: NANCY LUBALE
Compiled by: TechFlow
Growing optimism surrounding the potential approval of spot Bitcoin ETFs, the upcoming BTC halving, and positive market sentiment suggest that a cryptocurrency bull run could begin in 2023.
Despite low investor expectations for a recovery in the crypto market at the beginning of 2023, events throughout the year have surprised most market participants, with prices of Bitcoin, Ethereum, Solana, and many other altcoins soaring. The high volatility characteristic of crypto markets appears to be intensifying, with a bull market expected in 2024.
The global cryptocurrency market cap has reached $1.69 trillion, up 112% over the past 12 months. Bitcoin and Ethereum prices rose 154% and 93%, respectively. Among altcoins, this growth was even more pronounced—Solana and Avalanche (AVAX) surged 880% and 250% during the same period.
Key drivers behind the rise in cryptocurrency prices include increasing likelihood of spot Bitcoin ETF approvals, Ethereum's successful Shanghai network upgrade, and the upcoming Bitcoin halving.
Increased Probability of Spot Bitcoin ETF Approval
In the United States, discussions around Bitcoin ETFs continue to heat up.
According to Bloomberg’s ETF analysts, the probability of a spot BTC ETF being approved before January 10—the final statutory deadline for the SEC to make decisions on certain applications—is as high as 90%.
If approved, such ETFs could attract more institutional investors into the space, creating positive impacts not only on BTC but also on the prices of other cryptocurrencies.
Bitcoin advocate Michael Saylor, founder of MicroStrategy, stated that the approval of a spot Bitcoin ETF could be the biggest development on Wall Street in thirty years.
All Investor Groups Are Accumulating Bitcoin
Bitcoin holders are demonstrating confidence in BTC by increasing their holdings. On-chain data from Glassnode shows a reversal in trend, with long-term holders expressing optimism about the prospects of a Bitcoin bull market and continuing to accumulate.
Tracking long-term holder balances has historically been a strong indicator for identifying price tops and bottoms. In each market cycle, accumulation by holders is clearly visible until local prices peak, after which holders begin selling en masse to realize profits.
Moreover, Bitcoin whales holding at least 1,000 BTC are showing signs of accumulation, a signal historically associated with significant price rebounds.
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According to a report released by Glassnode on November 27, Bitcoin accumulation trend scores currently stand at 1, indicating that, overall, large Bitcoin whales are actively buying BTC.
Notable Bitcoin whale MicroStrategy continues to increase its Bitcoin holdings, purchasing an additional 14,620 BTC at an average price of $42,110 per coin, bringing its total holdings to 189,150 BTC.
Glassnode data also reveals that smaller-scale investors have set new records for Bitcoin accumulation in 2023, consistently reaching all-time highs.
As in previous cycles, this sustained accumulation suggests that the cryptocurrency market may not yet have reached its peak price level.
Bitcoin Halving and Historical Data Highlight Potential
Bitcoin’s price movements tend to follow cyclical patterns. Analysts have compared current price trajectories with historical trends, suggesting that today’s situation may resemble the potential bull runs of 2013 and 2017.
Similarly, Bitcoin’s historical bull markets typically follow a four-year cycle, often driven by events such as the Bitcoin halving, which reduces the rate at which miners create and earn new bitcoins.
The next halving event is scheduled for spring 2024. Historical data indicates that bull markets often begin several months before the halving and continue until Bitcoin reaches a new all-time high.
Indeed, with less than six months until the halving, growing numbers of people are predicting that BTC prices will reach six figures.
Crypto Market Sentiment Continues to Rise
Recently, social media circles have witnessed a resurgence of positive sentiment. The Crypto Fear & Greed Index, a barometer of investor sentiment, currently stands at 73, indicating widespread greed in the market.
Notably, this index has remained above 50 for most of 2023, indicating that market participants maintain a generally positive outlook on the broader crypto market.
This pattern of market sentiment has previously served as a precursor to price increases and could be signaling an upcoming bull market. Interestingly, the last time market sentiment reached such levels of greed was in November 2021, when Bitcoin hit its all-time high of $69,000.
Technical Indicators Also Reflect Bullish Trader Sentiment
On October 23, the total cryptocurrency market cap broke above its 50-week exponential moving average (EMA), reaching $1.1 trillion. At the time of writing, it has climbed to $1.632 trillion. Buyers may now be targeting the April 2022 resistance zone of $2.168 trillion. Technical traders often look for such key indicators ahead of anticipated reversals.
The Relative Strength Index (RSI) for the global cryptocurrency market has entered overbought territory, nearing the 80 resistance level, reinforcing the dominance of bullish momentum. A bullish crossover has also formed on the weekly EMA chart.
Furthermore, if buyers establish support above the $1.75 trillion mark with strong positive volume, the three-month uptrend could extend into 2024.
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