The cryptocurrency market is seeing a resurgence of investor optimism in the wake of Bitcoin’s recent rally.[0] Bitcoin (BTC) is currently trading at around $22,800, up 9% in the last week, and some analysts are noting that the bear market of 2022 might now be over.[1] With the bulk of Fed tightening seemingly already happened, risks are tilted towards an easing of financial conditions in 2023, a historically bullish macro backdrop for cryptocurrencies.
On-chain data is showing promising signs that a bull market may be here, with the annual rate of change in the Bitcoin Puell Multiple exiting the bear market zone.[2] The “Puell Multiple” is a metric that gauges the proportion of daily Bitcoin mining profits (in USD) to the 365-day moving average (MA) of the same.[3] If the figure of this metric is higher than 1, miners are currently earning more than the yearly mean.[2] This suggests that the bear market may be coming to an end, and that the crypto might have started transitioning towards a bullish trend.[3]
The Bitcoin Fear and Greed Index, an aggregate for investor confidence and attitude towards the market, has recently risen to a state of “greed” for the first time in nearly a year.[4] The recent increase in BTC’s value has been seen as a sign of the market’s improved outlook.[5]
In addition, a widely followed Bitcoin pricing model is sending a similar story.[6] According to the Bitcoin Stock-to-Flow pricing model, the Bitcoin market cycle is roughly four years, with prices typically bottoming somewhere close to the middle of the four-year gap between “halvings”.[7] This suggests that Bitcoin’s next big surge will come after the next halving in 2024.[6]
A key technical indicator has just flashed that Bitcoin is in the early stages of a new bull market, but some bearish signs remain for cryptocurrencies.[8] While the risk of loss is always a function of potential rewards, even the most conservative investors may be interested in the potential of digital assets. With the Fed’s easing of financial conditions in 2023 and the increase in investor confidence, now may be the time to enter the market for those interested in taking the risk. However, readers should always conduct their own research when making a decision.[9]
0. “Bitcoin fear and greed index enters ‘greed’ zone after 10 months” CryptoSlate, 27 Jan. 2023, https://cryptoslate.com/bitcoin-fear-and-greed-index/
1. “Bitcoin Price Prediction Daily (25-Jan-2023) Forming Another Bull-Flag?” Bitcoinsensus, 25 Jan. 2023, https://www.bitcoinsensus.com/bitcoin-price-prediction-daily-25-jan-2023-forming-another-bull-flag/
2. “Bitcoin Puell Multiple Starts To Leave Bear Market Zone, Bull Rally Here?” Geeks World Wide, 23 Jan. 2023, https://thegww.com/bitcoin-puell-multiple-starts-to-leave-bear-market-zone-bull-rally-here
3. “Bitcoin Puell Multiple Leaves Bear Zone, Bull Rally Here?” newsbtc.com, 23 Jan. 2023, https://newsbtc.com/news/bitcoin/bitcoin-puell-multiple-bear-bull-rally/
4. “Bitcoin ($BTC) Fear and Greed Index Shows ‘Greed’ for First Time in Nearly a Year” CryptoGlobe, 28 Jan. 2023, https://www.cryptoglobe.com/latest/2023/01/bitcoin-btc-fear-and-greed-index-shows-greed-for-first-time-in-nearly-a-year/
5. “Aptos Leads L1 Trade With 130% Gains, Bitcoin Bulls Fight For $23K, Sentiment Improves: This Week’s R…” CryptoPotato, 27 Jan. 2023, https://cryptopotato.com/aptos-leads-l1-trade-with-130-gains-bitcoin-bulls-fight-for-23k-sentiment-improves-this-weeks-recap/
6. “Bitcoin Miner Sales Slump to Three Year Lows as Capitulation Risks Fade – What Does This Mean For The BTC Price” Cryptonews, 26 Jan. 2023, https://cryptonews.com/news/bitcoin-miner-sales-slump-three-year-lows-as-capitulation-risks-fade-what-does-mean-for-btc-price.htm
7. “Has Bitcoin Bottomed? (Technical Analysis)” Seeking Alpha, 27 Jan. 2023, https://seekingalpha.com/article/4572877-has-bitcoin-bottomed
8. “Bitcoin’s Price Pauses. Why a Recent Trend Suggests a Big Spike Will Hit Friday.” Barron’s, 27 Jan. 2023, https://www.barrons.com/articles/bitcoin-ethereum-price-crypto-markets-today-51674815587
9. “Here’s why Bitcoin price could correct after the US government resolves the debt limit impasse” Cointelegraph, 26 Jan. 2023, https://cointelegraph.com/news/here-s-why-bitcoin-price-could-correct-after-the-us-government-resolves-the-debt-limit-impasse