Bitcoin prices have been a joy to see over the past few weeks, bounced hard from the $74,000 low and recovered above the $100,000 level. Interestingly, the latest on-chain data suggests that the best cryptocurrencies are preparing to regain the highest prices of the present, and perhaps embarking on a fresh bull run.
Bitcoin prices follow in the footsteps of gold
In a QuickTake post on the Cryptoquant platform, on-chain analyst Ibrahim Cosar proposed insights focusing on data on potential trajectories of Bitcoin prices over the coming months. The relevant metric here is the difference in growth rate (market capitalization vs. realization cap). This examines the difference between the market capitalization of an asset and the realized capital growth rate.
According to COSAR, growth rate difference metrics help to assess different market cycles from investors’ behavior (whether the market is overly pessimistic or optimistic). This indicator also helps identify the correlation between actual value growth and price growth while assessing the sustainability of price trends.
Source: CryptoQuant
As seen in the chart above, the positive regions (indicated in green) usually indicate bullish market conditions. This suggests that market capitalization is growing faster than the realisation cap, with more investors entering the market and taking new positions.
The negative (red) zone correlates with bear market conditions and major price corrections as more investors offload their assets. As prices drop and loss realizations increase, investors’ confidence in the market begins to decline.
The highlighted chart shows that Bitcoin prices have witnessed a recent shift from red (bare market) to green (bullet market). Cosar believes this change means a potential parabolic rise in BTC prices, as seen in gold prices over the past few months.
The bull cycle may still be ongoing: Encrypted CEO
Two months ago, Ki Young Ju, founder of encryption, assumed that BTC prices had peaked and the bull cycle was over. But following the impressive performance of Bitcoin prices over the past few weeks, analytics experts on the chain have returned to the declaration.
According to JU, the Bitcoin market is relatively diverse and appears to be moving away from traditional cycling theory. Crypto CEO hints that past cycles are managed by old whales, miners and new retail investors, with exchange-traded funds (ETFs) issuers, strategies (MSTRs), and institutional investors being the key players of current players.
However, JU said that despite the latest price action being very bullish, the Bitcoin market remains dull while absorbing new liquidity. Therefore, the founders of Crypto hinted at waiting for a clearer signal before taking a new market position.
At the time of this writing, the flagship cryptocurrency is just over $103,000, not reflecting any significant moves in the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
ISTOCK featured images, TradingView chart
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