Bitcoin has historically exhibited cyclical behavior with distinct "bull" and "bear" phases. The current bull cycle appears driven by technical catalysts like spot Bitcoin ETF inflows and robust fundamentals such as stablecoin adoption and rising DeFi TVL. Indicators suggest we're in the mid-stage (around the "fifth inning") of this cycle, with room for sustained growth.
Are We in a Bull Market?
Bitcoin prices surged past all-time highs in over 30 fiat currencies earlier this year, fueled by institutional adoption and improving liquidity. Traditional asset managers now analyze meme coins—a sign of broadening mainstream interest. With total crypto market capitalization nearing record levels (Chart 1), this raises the question: Is this a new bull market?
Defining a Bull Cycle
A bull market typically spans 3–4 years, starting from the prior cycle’s low. Prices rise gradually, peak, then stabilize or decline modestly (Chart 2). Key questions:
- Catalysts: What’s driving this cycle?
- Duration: How long might it last?
Key Drivers of the Current Bull Run
1. Spot Bitcoin ETF Inflows
Since January 2024, spot Bitcoin ETFs have absorbed 3x more BTC than new supply (Chart 4), creating upward price pressure. The U.S.-centric demand is evident via Coinbase’s premium over Binance (Chart 5), signaling strong institutional buying.
👉 How Bitcoin ETFs are reshaping crypto markets
2. Healthy On-Chain Fundamentals
- Stablecoin inflows correlate with BTC price rallies (Chart 6).
- DeFi TVL doubled since 2023, hitting ~$100B (Chart 7).
- Exchange BTC reserves dropped 7% since May 2023, indicating supply tightness (Chart 8).
Market Phase: Mid-Cycle Momentum
Indicators Suggest Room for Growth
- NUPL (~60%) approaches but hasn’t surpassed historical peaks (Chart 9).
- MVRV Z-Score (~3) remains below prior cycle highs (Chart 10).
- CBBI Index (79/100) implies nearing peak but not yet there (Chart 11).
Retail Sentiment Lags
- Crypto YouTube subscriptions and Google Trends for "cryptocurrency" trail 2021 levels (Charts 12–13).
- Coinbase app downloads spiked in March but later cooled (Chart 14), suggesting gradual retail re-entry.
Future Catalysts to Watch
- Institutional Adoption: Wirehouses and wealth managers may soon endorse Bitcoin ETFs for client portfolios.
- Macro Conditions: Interest rates and inflation data could sway market sentiment.
- Retail FOMO: A potential surge if prices continue climbing.
👉 Why Bitcoin’s scarcity is fueling long-term demand
FAQs
Q: How long will this bull market last?
A: Cycles average 3–4 years, but ETF inflows and institutional interest may extend this phase.
Q: Should investors worry about volatility?
A: Yes—Bitcoin’s history includes 30–50% drawdowns even in bull markets (Chart 15).
Q: What’s the biggest risk?
A: ETF buyers may panic-sell during corrections, though current dips have been shallow.
Conclusion
Bitcoin’s fundamentals and institutional inflows paint a bullish picture, but vigilance is key. Monitor ETF flows, macro trends, and retail engagement to gauge the cycle’s next phase. With untapped demand from both institutions and散户, the rally may have further to run.
Disclaimer: Past performance doesn’t guarantee future results. Cryptocurrencies are volatile—invest responsibly.