Multiple indicators show that BTC still has the possibility of a second peak

But at present, the market is full of uncertainties due to increased regulation in various countries and expectations of interest rate hikes in the United States. In the short term, BTC will still face the test of the $40,000 mark.

Whether the bull market of crypto assets has ended has become the most concerned topic among investors after the "May 19" crash. After nearly a month of low consolidation, BTC returned to the $40,000 mark on June 14, which boosted the confidence of holders to a certain extent.

In terms of fundamentals, the United States is still maintaining an easy monetary policy, which is a positive for the BTC market. From the perspective of on-chain indicators, in the past 25 days, the addresses holding 100 to 10,000 BTC have increased their holdings to more than 90,000 BTC, which shows that whales have calmly swept up the market during the panic stage.

Some advanced indicators show that this round of bull market is still likely to continue. The moving average multiplier top and bottom indicators show that in this round of bull market, BTC has not yet broken through the "two-year moving average * 5" trend line. In the past three bull markets, the top of each cycle broke through this trend line. In addition, the S2F (Stock-to-Flow) scarcity indicator shows that the current BTC S2F value is 53.73, the highest point in history. This indicator suggests that the expected price of BTC can reach $92,200.

Jiang Zhuoer, founder of Litecoin Mining Pool, believes that the larger the volume of BTC, the slower the rise will be. If the rise is slow, it will be less likely to trigger a large increase, and new funds will not be able to keep up. The bull market will last longer, and "the bull market is not over yet."

It should be noted that even though BTC does not rule out the possibility of a second peak, the regulation of countries around the world is still an uncertain factor, including the fundamental changes brought about by the expectation of interest rate hikes in the United States. Investors need to be vigilant about risks at all times.

Whales’ increased holdings provide momentum for BTC’s rebound

Shortly after the May 19 crash, BTC briefly returned to above $40,000, but each breakthrough was suppressed by short sellers without exception. Until June 13, BTC fell to a minimum of $34,756, seemingly out of reach of $40,000. But the next day, this weak and volatile situation was reversed.

On June 14, BTC opened at $36,073, up 12.9% in a single day, and finally closed at $40,685, breaking through the $40,000 mark again after more than 20 days. Compared with the previous rapid price declines, BTC was relatively stable this time. As of 3 p.m. on June 16, BTC was quoted at $40,300, having remained above $40,000 for two days.

BTC returns to $40,000

The return of Bitcoin to over $40,000 has given the market a shot in the arm. In the past month, the market has been in a period of emotional recovery after the plunge, and the market has fluctuated at a low level. Many people believe that the bear market has arrived. Now, BTC has led the market to rebound, allowing at least some investors to continue to expect a bull market.

However, now is not the time to be optimistic. Compared with the high of $64,800 set by BTC in April, the current market price is still 37.8% lower than the previous high. Whether the market is a short-term rebound or the bearish trend begins to reverse has become the focus of investors.

From a fundamental perspective, the most important factor that promotes the current bull market in crypto assets has not changed. There is no sign of tightening of US monetary policy for the time being, and the outside world still maintains high inflation expectations. With relatively stable fundamentals, some on-chain indicators may be able to provide reference value for the next trend of the market.

Based on the experience of the end of each bull market in the past, a large amount of turnover will occur at the high price of each cycle, that is, the winners will sell their chips in a concentrated manner and "distribute" them to new investors in the market, who will become "buyers". Judging from the current on-chain data, the main players in the market do not seem to have any intention of profiting and exiting, but instead continue to increase their positions during the low price period.

According to Santiment data, addresses holding 100 to 10,000 BTC have added more than 90,000 BTC in the past 25 days. Currently, these addresses hold a total of 9.11 million BTC, reaching the highest point since April 23, with a total value of US$366.89 billion, accounting for 48.7% of the total supply of Bitcoin.

In the market panic stage, crypto asset whales seem to be very calm. The on-chain capital flow relatively intuitively reflects the intentions of the big players, and this part of the buying provides momentum for BTC's rebound. However, relying solely on this on-chain indicator is not enough to judge the market trend. Some verified advanced indicators are more meaningful for long-term reference.

Multiple indicators suggest that BTC may still reach the top again

Looking back at the development history of BTC over the past 10 years, this growing market has experienced four bull markets, which occurred in 2011, 2013, 2017 and now in 2021.

Jiang Zhuoer, the founder of Litecoin Mining Pool, takes the time when the bottom price of each cycle appears as the starting point, trying to find similarities in the price trends of each cycle, so as to predict future price trends.

"Jiang Zhuoer Cycle" Comparison Data Chart

According to the "Jiang Zhuoer Cycle" comparison data chart listed by QKL123, the current fourth bull market cycle of BTC lasts for 914 days, which is lower than the 1064 days of the previous cycle. Jiang Zhuoer believes that the larger the volume of BTC, the lower the volatility, and the slower the rise will be. If the rise is slow, it is less likely to trigger an event of excessive increase, new funds cannot keep up, and lead to a "high-level collapse", and the bull market will last longer. Therefore, the bull market in the first three cycles lasted longer and longer, and the increase multiples became smaller and smaller.

If we analyze this rule, BTC’s fourth bull market cycle may still continue. After the “May 19” crash, Jiang Zhuoer also said that the bull market has not yet ended.

However, there are still many skeptics who believe that Jiang Zhuoer's cyclical data comparison is like "carving a boat to find a sword". After the market plummeted and did not rebound quickly to the previous high, many people believed that US$64,800 has become the top area of ​​this round of BTC bull market.

In the past few cycles, analysts have also observed multiple indicators that can indicate the top of the cycle. The moving average multiplier top and bottom indicator is one of them.

Moving Average Multiplier Top and Bottom Indicator

As shown in the above figure, the red line above is the trend of BTC's "two-year moving average * 5", the green line below is the trend of BTC's "two-year moving average", and the orange line is the price trend of BTC. It can be seen that BTC is mostly between the red and green lines, and once it breaks through the red line, the price will quickly reach the top of the cycle, and if it falls below the green line, it often reaches the bottom of the cycle.

In the past three bull markets that have ended, the highest point of each bull market has broken through the "two-year moving average*5", but the BTC price has not broken through the upper trend line in this bull market. The time point closest to the upper trend line was in February this year, when the price of BTC was about $57,000, but BTC seemed to open up space and broke through $64,000. As of June 15, the moving average multiplier top and bottom indicator suggested a top price of $92,300 and a bottom price of $18,500.

On June 16, PlanB, the creator of the S2F (Stock-to-Flow) scarcity indicator, posted on social media that both the S2F model and on-chain signals indicate that the bull market cycle is in its second round. It is reported that the S2F indicator measures the scarcity of BTC by the ratio of BTC stock to annual issuance. The higher the S2F, the more scarce BTC is. For reference, the indicator calculates that the current S2F values ​​of gold and silver are 62 and 22 respectively.

On June 15, BTC's S2F value was 53.73, a historical high. The indicator suggests that based on this S2F value, the expected price of BTC can reach $92,200.

Based on the above indicators, BTC does not rule out the possibility of a second peak. However, at present, the market is full of uncertainties due to the increasing supervision of various countries and the expectation of interest rate hikes in the United States. In the short term, BTC still needs to face the test of the $40,000 mark.