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Analyze The Recent Performance Of Bitcoin And Find Out If The Bull Cycle Has Already Ended
The Bitcoin market has generated much discussion, especially with price updates. The 10% drop from its all-time high has made many wonder if the cryptocurrency has already reached its peak in this bull cycle.
However, when analyzing on-chain data and historical metrics, it is possible to see that Bitcoin may still have a lot of room to grow.
Recent Performance And Market Retractions
Recently, Bitcoin experienced a 10% retraction, which led to discussions about the end of the bullish phase. This drop is seen by many as a sign that the cycle is coming to an end. However, those who track Bitcoin’s history know that this type of correction is common.
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Bitcoin has previously pulled back 20% to 40% before reaching final peaks in past cycles. In other words, we are still far from a drop pattern that signals the end of the cycle.
On-Chain Metrics Indicate Room For More Growth
An on-chain analysis, such as the MVRV Z-score, shows that Bitcoin still has potential for precise bullishness.
This metric, which evaluates market value relative to realized value, typically enters a “heated” zone before cycle peaks. At this moment, there are no signs that Bitcoin is improving that zone, which indicates that the market may continue to rise.
Another important metric is the Spent Output Profit Ratio (SOPR). The SOPR reflects the ratio of profits taken on spent outputs, and in recent days, realized profits have been declining. This suggests that fewer investors are selling their holdings, reinforcing the idea that the market is more stable.
Furthermore, the Value Days Destroyed (VDD), which measure the liquidations of long-term holders, also indicate a reduction in selling pressure. This movement suggests that Bitcoin is stabilizing at high levels, with no clear signs of a major collapse in the short term.
The Role Of Institutional Investors And Market Sentiment
The behavior of institutional investors, such as MicroStrategy, is also relevant. The company continues to accumulate Bitcoin, which reinforces confidence in its long-term value.
On the other hand, sentiment in the derivatives market has turned negative, which may indicate that overly leveraged traders could be liquidated. This type of scenario has historically shown to be a good sign that the price of Bitcoin may reach a short-term bottom.
Macroeconomic Factors Influence The Price
The macroeconomic situation is also impacting the price of Bitcoin. Central banks, with their quantitative tightening policies, are limiting liquidity, which has temporarily affected Bitcoin’s price.
In addition, the global M2 money supply has contracted, impacting risk assets like Bitcoin. However, large financial institutions, including JP Morgan, indicate that quantitative easing may return by mid-2025, which could further boost Bitcoin’s value.
With information from bitcoinmagazine.
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