Bitcoin’s market resiliency has been a topic of discussion recently, with lead Glassnode analyst James Check predicting a bullish trajectory for the cryptocurrency. According to him, the Bitcoin market has shown stronger foundations compared to previous cycles, citing the entry into a “bull market distribution phase” after the launch of U.S. Bitcoin ETFs by BlackRock and Fidelity in January.
One key factor contributing to the positive outlook is the presence of high-conviction HODLers who have held onto their coins for over 155 days. These long-term investors are now starting to sell their assets at a profit, signaling a shift in market dynamics. Historically, this trend has been associated with the identification of Bitcoin cycle tops, but the analyst believes that this time could be different.
The influx of funds from Bitcoin ETFs is another factor driving the market optimism. Check highlights the importance of passive flows into Bitcoin, with investment funds like BlackRock’s Global Allocation Fund showing interest in allocating a portion of their portfolio to Bitcoin ETFs. The cumulative net flows into these ETFs have surpassed $9.3 billion since their launch, indicating a growing demand for exposure to Bitcoin.
Check emphasizes the significance of on-chain analysis in understanding market dynamics. He points to Bitcoin’s “realized cap” as a key metric, which tracks the total value of all coins based on the price at which they last moved. This metric has been trending upwards in recent months, reflecting strong demand for Bitcoin and preventing the network’s unrealized gains from reaching unsustainable levels.
Based on the aforementioned factors, the analyst is confident in his prediction that Bitcoin will surpass $250,000 in the current cycle. He attributes the truncated nature of the previous cycle to the influence of GBTC and the rapid price increase that ensued. In contrast, the current uptrend is being characterized as robust and sustainable, driven by a combination of HODLer conviction and institutional demand.
James Check credits Bitcoin HODLers for “pulling back the slingshot” on the cryptocurrency’s price, creating a scenario where the market absorbs circulating supply leading to price appreciation. The demand generated by ETFs further reinforces this trend, with the marginal bid pushing prices upwards rapidly. As the market continues to evolve, all eyes will be on Bitcoin as it charts its course towards the predicted $250,000 price target.
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