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Disclaimer: The following content is only a sharing of personal subjective opinions and does not constitute any investment advice.
The previous article made a relatively concise analysis of BTC's technical aspects. This article discusses two issues from a market perspective.
1: Has this round of BTC bull market ended? What data signals can be used to determine whether the correction has stopped?
2: Does insufficient liquidity mean the end of the bull market?
Conclusion: Setting a new all-time high does not mean the end of BTC. The current bull market of BTC is far from over and is currently in a secondary correction within the main trend.
My personal expectation is that it is expected to reach the top and become the world's number one safe-haven asset in the 21st century from the fourth quarter of this year to the first quarter of 2025.
The technical analysis can be assisted by signals from STH-NUPL, negative extreme values of funding rates, USDC market share, and BTC market share.
data:
BTC market share and USDC market share. The stable currency chooses USDC instead of USDT because USDT has a higher correlation with altcoins and a poorer correlation with BTC.
The market share of BTC is basically negatively correlated with that of USDC. They are in a relationship of mutual increase and decrease. When the market share of BTC is bearish, more BTC is converted into stablecoins, and the price of BTC is bearish. When the market share of USDC is bearish, more stablecoins are converted into BTC, and the price of BTC is bullish.
As shown in Figure 1: On the right side of BTC market share, RSI crosses the overbought threshold downward, and MACD is about to cross. You can pay attention to the technical signals of 54.08% and 53.13%.
Figure 2: USDC has a bearish bat. The price breaks through the trend line connected by XB to confirm point C and point D at 1.65%. In the current trend structure, a Choch reversal occurs and continues to appear BOS (new high). In the process of confirming the upward trend, further confirmation is made to point D.
Small conclusion 1: BTC has confirmed that the correction has not ended and will continue to fall in the short and medium term.
You can set an alarm for USDC at 1.65%, and set alarms for BTC at 53.13% and 54.08%, pay attention to the superposition of technical signal buffs, and use these two data to supplement and strengthen the subsequent BTC longs.
The conclusion at the beginning is that the current bull market of BTC has not ended, and it is still in a secondary correction in the main trend. The basis is as follows
P3: MVRV value (ratio of BTC market value to BTC real value, measuring whether the market value is seriously higher than the real value, and whether there is a serious bubble in the market)
This is the first time that the extreme value range has been reached since this round of rise. Note that this is the first time. Referring to history, each round of bull market MVRV will not end just after reaching the extreme value. We know that the BTC price has hit a record high, but the MVRV is even lower than the MVRV at the high point in 2021. Relatively speaking, the market value is not crazy at all, and there is still a lot of room for growth.... This is quite scary. I am looking forward to how much BTC can rise in the bull market..
P4: SOPR value (aSOPR indicator is the ratio between the selling price and the cost price of all BTC sold at the moment. It represents the realized profit ratio)
The higher the SOPR value means a very profitable profit-taking action. It can also measure the profit-taking action of the main force, because the main force's position building cost must be much earlier than the leeks, so their position building cost is generally relatively lower. The higher the SOPR value actually means that the cost price of the BTC taken here is very low, which basically shows that the BTC taken for profit comes from the main force.
SO, SOPR value and MVRV are also a peak signal, but we need to pay attention to one thing, the price of BTC in this round has hit a record high, but the SOPR value is the lowest in history. Although the SOPR value has also reached the extreme value range, it is just reaching the edge. It can only be said that it has gone through a period of bull market or is determined to be at the level of the bull market cycle, but it cannot be said that it is over. It is still a little bit short and needs other conditions to be superimposed.
P5：Puell Multiple
It is the ratio between the total revenue of miners and the annual average.
Have you ever seen that during a bull market, the income of miners did not reach an extreme level, and even did not reach the income level of miners in the previous round?
In a bull market, everyone goes crazy and gets rich, and the whole market is very serious and extreme. How is it possible that the miners' income has not even reached the level of the previous round, or even the extreme level? It cannot be considered the end of the bull market, and it is still a little short of the arrival of the bull market.
P6: Reserve Risk Index
It is the ratio between the reserve risk and the annual average.
Like the above, this is a top and bottom analysis signal. It is also touched for the first time and just reaches the passing line of the bull market.
In summary, the common point of the above four on-chain indicators is that they are all the first time to reach extreme values, and the degree of extreme is "just reaching the passing line of the bull market", among which the miner income does not even reach the passing line, and this is the result of BTC hitting a record high. Basically, BTC still has room for growth in the future, and this room for growth cannot be said to be extremely large, but it can be said to be "very large", which is a bit unimaginable...
In every bull market in the past, there will be a correction after the "first" touch, but everyone should note that the bull market is not just rising but not falling. A large correction in the bull market is very reasonable and normal. But it is undeniable that BTC is in a bull market environment and has not really entered the craziest "big bull" stage.
Now that we are talking about the pullbacks in a bull market, let me add another point: what is the average pullback in a bull market?
The following P7 indicator: bull market correction retracement range
Throughout the history of BTC, after setting a new all-time high for the first time, there will be a period of inertia to continue rising, entering the craziest top bull stage.
After setting a new all-time high for the first time, there is basically a retracement of at least 25%, and some retracements are as high as over 40%, and then they continue to take off.
This data is the result of the big brothers who firmly believe that "the bull market will not pick you up". There is no bull market that will not pick you up. Every bull market will pick you up at a very cheap price and then take off.
So please note that a bull market does not only rise but also never fall. On the contrary, the amplitude of the pullback in a bull market is even greater. A bull market just has a larger range of fluctuations rather than only rising but not falling. It is equivalent to encountering a 30-minute level pullback when you are doing a 4-hour level trend trading.
In the current bull market phase, there has not even been a pullback of more than 20%...DUCK does not have to worry that the bull market is over, it has not even begun.
I will add two more bull market top analysis indicators, P8 and P9. I won’t introduce them in detail. They also have not reached the limit level and are almost there.
Question: Does lack of liquidity mean the end of the bull market?
Market supply and demand conditions.
Total supply of the two major stablecoins in circulation (this data focuses on market sentiment, meaning whether the demand for stablecoins is increasing or decreasing)
There is no decline in the demand for stablecoins, but there is a slight decline in USDC, but it is filled by USDT, and the overall trend continues to rise.
The on-site BTC stock is still declining and has reached the lowest level in five years. The total stock in all exchanges is only 2.2 million BTC.
So regarding the issue of illiquidity, we need to understand why illiquidity is insufficient. Bearish illiquidity is caused by lack of purchasing power. The current illiquidity is caused by lack of shipments. The stock of USDT and USDC is the highest level in 5 years, and it can be pulled up at any time.
So, not pulling when you have money and pulling when you don’t have money are two different things.
Poor liquidity depends on the cause of the poor liquidity. Lack of money to buy and lack of goods to sell are two different things. Pay attention to this.
At the data level, we can focus on the following three most convenient data to assist in superimposing technical signals.
1: The funding rate has become negative for the first time. Waiting for the extreme value to be captured after the callback.
2: Extreme negative values of SOPR captured.
3: STH NUPL (unrealized profit and loss of short-term holders) after entering the red zone.
