These Indicators Suggest Bitcoin’s Bullrun is Far from Over

When Bitcoin reaches a new ATH, it is easy to indulge in a brief dopamine-hit, followed by anxiety when it drops. To avoid such emotional travails, take time to read corresponding indicators pointing to the same outcome. There are a few of such indicators presently available.

Understanding Bitcoin: Peaks and Valleys

In the early stages of Bitcoin’s bullrun, The Tokenist reported an anomaly in the interest surrounding Bitcoin. Compared to 2017’s bullrun, search volume for “Bitcoin” only represented 13% of interest that time around. This was the first major indicator that Bitcoin, alongside people holding it, matured.

It also meant that Bitcoin’s bullrun, spurred on by BTC’s third halving on May 11, acquired a much longer tail. Now, it appears that this tail is even longer than initially anticipated. In the last two weeks, just as it appeared Bitcoin would breach $60k on February 21st, its price dropped by over 20% a couple of days later.

An over-$12k precipitous drop is enough for a heart-stopping panic, but not for those who are inured to seeing Bitcoin jump over steep valleys to even higher peaks. Regardless of which group you fall under, there are good reasons to believe Bitcoin’s $50k will soon become the next $30k, relegated to instilling regret.

Bitcoin Reaching $100k within 2021?

In a March outlook report, Bloomberg Intelligence analyst Mike McGlone tied Grayscale premium’s drop to below zero to a renewed Bitcoin bullrun. McGlone previously predicted Bitcoin’s rise this year to $50k, so it bears considering his latest connecting of dots. Grayscale premium represents the differential between two price points:

• Bitcoin price derived from Grayscale Bitcoin Trust (GBTC), which is publicly traded.
• Bitcoin price derived from cryptocurrency exchanges.

Since its existence, this price differential – Grayscale premium – has been positive. What does it mean when it goes under zero? It may signal that the Bitcoin’s above-mentioned 20% price drop has reset the market for a renewed bullrun.

What Does Bitcoin’s On-Chain Indicator Say?

Glassnode cryptocurrency specialist, William Clemente, pointed to Reserve Risk indicator as a valid sign that Bitcoin is not even closing its bullrun. Instead, it is yet in its early to mid-stage. The Tokenist stated many times the relationship between HODLERS and BTC’s price moves. Glassnode’s Reserve Risk simply quantifies the long-term HODLING confidence compared to BTC price moves.

As you can see from this indicator, Bitcoin’s current RR peak is barely halfway close to previous three ones. This underlines the validity of viewing Bitcoin’s bullrun as one that is yet to leave its early stage. It took previous three RR peaks – 2013, 2014, 2017 – for Bitcoin to enter the bear market stage.

Alongside the RR indicator, it bears noticing that Bitcoin’s price did not follow closely the drop of the stock market for the last day, as you can see from S&P 500 ETF compared to BTC.

In a bear market, it is a long-established truism for assets to increase their correlation. Notwithstanding that Bitcoin didn’t exist prior to many such studies, it bears remembering that Bitcoin is a unique asset, making it more resilient to common market vagaries. Lastly, there is the crypto exchange activity to take into account.

Exchanges are delegated to balance Bitcoin’s supply and demand. At the end of January, BTC holdings on exchanges were record-low for the year. After Bitcoin went under $50k, and despite whales increasing BTC deposits for selling purposes, its illiquid supply is still holding strong, courtesy of Glassnode.

Bitcoin’s illiquid supply is comparable to the end of 2020, when it was nearly 80% illiquid, meaning not easily accessible for buying and selling. In turn, this represents yet another bullish indicator.

A single Bitcoin is already enough to buy an apartment in most of the world’s real estate markets. Do you think it will be enough to buy a mansion by the end of the year?