Bitcoin Bull Market Analysis: Are We Still Early?
The Bitcoin (BTC) bull market is in full swing, with the price of BTC up 120% this year. However, despite this significant increase, the much-anticipated “fear of missing out” (FOMO) has yet to appear in the market. On-chain transaction data from statistics platform Look Into Bitcoin reveals that younger bitcoins are only starting to be involved in transactions, indicating that we may still be in the early stages of the bull market.
Bitcoin has been trading near 18-month highs and has surpassed several key resistance levels. While the number of smaller wallets is increasing, there has not been a major influx of speculators returning to the network. Speculators are individuals who hold BTC for short periods of time, typically to take advantage of price fluctuations.
Look Into Bitcoin creator Philip Swift points to the Realized Cap HODL Waves metric, also known as RHODL Waves, as evidence of the current state of the market. RHODL Waves splits the existing HODL Waves metric, which categorizes BTC by age group, and compares it to the price at which the coins were last moved on-chain. This metric reveals a spike in coins that move frequently during bull markets, and a decrease in activity during bear markets when investors are hesitant to sell.
In analyzing the RHODL Waves chart, Swift comments, “Warmer colored low timeframe waves are only just starting to increase as coins are transferred on-chain. No FOMO yet. We’re still early.”
Bitcoin Profitability Nears Potential Break-Even Point
Examining Bitcoin supply “age bands,” Onchained, a contributor to on-chain analytics platform CryptoQuant, highlights the profitability dynamics of BTC holders who increased their exposure leading up to the 2021 all-time highs. Using the Net Unrealized Profit/Loss (NUPL) indicator, which provides profitability ratios for stored coins, Onchained reveals that most UTXO age bands are currently in a profitable state, except for holders with bitcoins held for 18 months to 3 years.
This aligns with their entry point during the Bitcoin price rally to $67,000. As Bitcoin continues its rally beyond $39,000, their NUPL nearing the profitability benchmark of 0 suggests a potential break-even point for these holders.
According to CryptoQuant data, the overall proportion of unspent transaction outputs (UTXOs) currently at a loss is just 11.6%. This indicates that the majority of BTC holders are currently in a profitable position.
The Bitcoin bull market is showing promising signs, with the price of BTC continuing to rise. However, the expected FOMO has yet to materialize, indicating that we may still be in the early stages of the bull market. On-chain transaction data and profitability metrics suggest that there is still room for growth and potential break-even points for certain BTC holders.
Disclaimer: This article does not provide investment advice or recommendations. As with any investment or trading decision, there are risks involved, and readers should conduct their own research before making a decision.