If these are the Characteristics of an Early Bitcoin Bullrun, When Can we Expect the Cycle’s Peak?

Bitcoin (BTC) ended the week at approximately $68,400, showing a slight 0.8% decrease from the previous week’s closing value of around $69,000. Throughout the week, BTC displayed significant volatility, with a price range of 13.4%. The week commenced with robust momentum as BTC surged to $72,000 on Monday. Subsequently, the price reached a new all-time high of nearly $73,800 on Thursday, following peaks of over $73,000 on both Wednesday and Thursday.

On the same Thursday, BTC experienced a sharp decline to $68,000 before rebounding to close around $71,400. On Friday and Saturday, selling pressure persisted, driving BTC to trade as low as $64,700 and closing Saturday near $65,300. However, positive momentum returned on Sunday, nearly recovering the weekly loss and closing around $68,400.

Despite the volatility and fluctuating prices, the previous week demonstrated continued strong momentum for BTC Spot ETFs, with net inflows recorded on all trading days. The weekly net inflow surpassed $2.5 billion, with Tuesday alone witnessing a net inflow of over $1 billion. The cumulative net inflow since inception now stands at approximately $12.2 billion.

Trading volume for BTC Spot ETFs also witnessed an upward trend, with total trading volume reaching $141.7 billion since inception, including nearly $28 billion traded in the last week. This translated to a daily trading volume exceeding $5.5 billion during the previous week, contributing to a higher average daily volume since inception, currently standing at approximately $3.15 billion.

These figures underscore the sustained momentum of investments from traditional finance into the digital assets space. Despite BTC’s price stability last week, the demand primarily stems from ETFs, while native digital assets investors are more active on the selling side.

This trend is evident in the decrease of BTC held by long-term holders, referring to BTC that remained unmoved for at least 155 days. At the beginning of 2024, this supply was nearly 16.3 million BTC, gradually decreasing to about 15.1 million BTC as now. This shift reflects traditional investors driving buying activity through ETFs, while native digital assets investors, who accumulated during the downtrend in 2022 and 2023, are now profit-taking at a higher rate, reducing long-term holder supply.

Such behaviour is characteristic of early bull phases, where long-term holders distribute assets to new investors. If the current market remains in an uptrend, analysing the past cycles, this pattern could persist until the supply from long-term holders matches the demand from new investors, which usually coincides with the cycle’s peak and the beginning of a downtrend phase.

Notably, the BTC halving is approximately one month away, historically preceding cycle peaks between 6 and 12 months later. If historical patterns repeat, the current cycle’s peak could occur in late 2024 or the first half of 2025.