As a seasoned crypto investor with a knack for deciphering market trends, I find myself standing at the precipice of yet another intriguing phase in this rollercoaster ride we call Bitcoin. The latest dip has been a familiar dance, reminiscent of the 2017-2018 bull run, but with a more mature and sophisticated market.
The cooling-off period, as suggested by CryptoQuant’s analysis, resonates with my personal observations. I’ve seen this pattern before – a surge followed by a temporary correction, only to be replaced by renewed vigor. The declining SOPR, MPI, and network fees are all symptoms of the market taking a breather, not signs of an imminent bear market.
The selling from old whales is like an old friend visiting before moving away – it’s bittersweet but expected. However, the institutional buying, particularly through Coinbase, is like a new neighbor moving in with a bag full of potential. The low daily premium on Coinbase suggests we might need to invite them over for a cup of coffee and some friendly conversation to rekindle the momentum.
In terms of investment strategy, I’m holding tight and keeping my eyes on the horizon. As the saying goes, “Bear markets don’t kill you, bear markets make you.” So, I’ll weather this storm with a smile on my face and a joke up my sleeve: “Why did Bitcoin cross the road? To get to the other side of the blockchain!” After all, in the world of crypto, it’s always one step forward, two steps sideways, and three steps back… but we keep dancing!
2024’s end saw a dip in crypto values, with Bitcoin’s post-election rise beyond $100,000 slowing down. As we stepped into 2025, Bitcoin reached nearly $97,000, but it subsequently retreated slightly.
Instead, the recent CryptoQuant analysis suggests that Bitcoin’s bull run may not have concluded yet. This current stage is seen more as a pause or correction, rather than the final phase of the cycle.
Momentary Slowdown
Following Bitcoin’s price exceeding $108,000, there was a period of decline that caused some worry about prolonged price plateaus similar to the six-month dip seen before. However, crucial indicators from on-chain analysis offered a more optimistic perspective on the market’s condition.
As a crypto investor, I’ve been keeping an eye on the Adjusted SOPR (Spent Output Profit Ratio) from CryptoQuant. This metric, which filters out short-term market fluctuations by ignoring transactions less than an hour and uses a 7-day Simple Moving Average (SMA), is currently above 1 but showing a downward trend. This trend might indicate that profits are becoming scarce for participants, yet it aligns with historical patterns. In the past, when the SOPR has dipped below 1, it often precedes reversals in bull markets.
In much the same way, the Miner Position Index (MPI) demonstrates a decrease with no signs of significant Bitcoin transfers to exchanges. This pattern suggests that miners, including major corporations, are keeping their Bitcoin holdings, although it’s normal for them to occasionally sell some for operational costs.
Alternative measurements, like the overall transaction fees, indicate a decrease in on-chain transactions. This trend is supported by falling funding rates, which typically signal upcoming Bitcoin rallies, especially during times of pessimistic sentiments.
Based on my extensive experience observing market trends over the years, it appears that we are currently witnessing a temporary cooling-off period in the ongoing bull market. I have seen similar patterns before, and they often precede a brief pause or consolidation phase. The reduced activity on the blockchain and declining metrics support this hypothesis, but I want to emphasize that there is no solid evidence yet indicating we’ve reached the cycle peak. As always, it’s essential to remain cautious and keep a close eye on market indicators while making investment decisions.
Old Bitcoin Whales Selling Amid Institutional Buying
As per an update from Ki Young Ju, the CEO of CryptoQuant, it appears that large Bitcoin investors, often referred to as “old whales,” are currently unloading their holdings in the market. This is suggested by a high volume of over-the-counter transactions and substantial deposits into exchanges. Yet, he reassured against panic, suggesting that these sales should not be expected to trigger major disruptions or a market crash.
Ju observed that it’s primarily US institutions, notably Coinbase, driving the demand for buying. However, he mentioned that the daily price difference on Coinbase (premium) is at its lowest in years, suggesting a decline in momentum. To sustain further growth for Bitcoin, an increase in this premium is required.
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2025-01-03 19:54