Bull run is far from over due to halving narrative

In the past 48 hours, the price of Bitcoin has fallen 13% from its all-time high of $73,835 to around $60,000. The correction was caused by an overheated market, which analysts called a “pre-halving retracement” with about 30 days to go before the Bitcoin halving event.

Bitcoin/USD daily chart. Source: TradingView

However, a report from CryptoQuant suggests that the Bitcoin bull cycle is not over yet, given relatively low investment flows from new investors and price valuation metrics that remain below levels seen at past market tops.

The on-chain data analysis company’s Crypto Weekly Report shows that 48% of Bitcoin investment comes from short-term holders. According to CryptoQuant analysts, “bull cycles typically end with 84%-92% investment from these new investors.”

“The Bitcoin bull cycle is far from over, as indicated by the relatively low level of new investment flows.”

Bitcoin realized cap - percentage of OTXO age range. Source: CryptoQuant

The chart above also shows that the indicator “reached a similar level to mid-2019 (52%), when Bitcoin also experienced a meaningful correction,” which is something short-term traders should be wary of.

The CryptoQuant report also shows that valuation metrics remain below levels seen at past market peaks.

“The CryptoQuant P&L Index remains outside the market top zone (red zone) and above the 1-year moving average of the index.”

Bitcoin: CryptoQuant Profit and Loss (PnL) Index. Source: CryptoQuant

CryptoQuant’s PnL Index, which consists of three on-chain metrics showing Bitcoin profitability, has previously suggested that the cryptocurrency market will enter a bull cycle in 2024. However, the above chart shows that current levels are slightly lower than those observed when the market peaked during the 2013, 2017, and 2021 bull runs.

There is only one month left until the Bitcoin halving event

In addition to the indicators discussed above, the upcoming Bitcoin halving event is expected to be a major driver in boosting Bitcoin prices, ushering in a parabolic uptrend.

According to CoinMarketCap’s halving countdown, there are less than 31 days left until Bitcoin’s next halving event.

Bitcoin halving countdown. Source: CoinMarketcap

With approximately 4,450 blocks left, Bitcoin’s fourth halving is expected to occur on April 20, reducing miners’ block rewards by 50% from 6.25 BTC to 3.125 BTC.

Historically, the halving of Bitcoin supply has been associated with a rise in Bitcoin prices. The halving always precedes a major bull run in the Bitcoin market.

Standard Chartered Bank made a bold prediction, raising its 2024 BTC price forecast from $100,000 to $150,000.

Standard Chartered analysts wrote in a note to clients on Monday, March 18:

“For 2024, given the stronger-than-expected price gains so far this year, we now think it’s possible that prices could reach the $150,000 level by the end of the year, up from our previous estimate of $100,000.”

The bank also predicts that BTC’s price will reach a cycle top of $250,000 in 2025 before stabilizing around $200,000.

While the bank’s analysis is not based entirely on the halving event, it draws on the impressive performance of spot Bitcoin exchange-traded funds since they began trading on January 11, and the different dynamics they bring to the market during this halving cycle.