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Bitcoin breaks through $57,000, is it the start of a bull market or a short-term high?

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Matrixport said in a report that it expects BTC prices to rise to $63,000 in March 2024.

Original Title: "Bitcoin rises nearly 10%, breaking through $57,000. Is this the start of a bull market or a short-term high point?"

Original Author: Azuma, Odaily Star Daily

After more than a week of horizontal adjustment, the cryptocurrency market has once again ushered in a turning point.

Last night and this morning, the market saw a significant increase again. According to Ouke OKX, BTC briefly broke through 57,000 USDT and reached a high of 57,500 USDT, a new high since November 2021. As of the time of writing, it is currently trading at 56,395.8 USDT with a 24-hour increase of 9.54%. ETH also broke through 3,200 USDT and is currently trading at 3,233.56 USDT with a 24-hour increase of 4.29%.

Except for BTC and ETH, some mainstream coins that have also experienced long-term consolidation have rebounded. As of the time of writing, SOL is temporarily reported at 110.85 USDT, with a 24-hour increase of 7.5%; BNB is temporarily reported at 401.09 USDT, with a 24-hour increase of 4.8%; MATIC is temporarily reported at 1.07 USDT, with a 24-hour increase of 7.8%; ADA is temporarily reported at 0.6274 USDT, with a 24-hour increase of 7.7%.

However, the upward trend has not spread to all sectors, and Layer 2 sectors as well as DeFi have not kept pace with the overall market due to significant changes in market conditions in the previous period.

Due to the overall upward trend in the market, the total market value of cryptocurrencies has also grown rapidly. According to CoinGecko data, the current total market value of cryptocurrencies has exceeded 2.24 trillion US dollars, with a 24-hour increase of 7%. Alternative data shows that the enthusiasm of cryptocurrency users for trading has also significantly increased, with today's panic and greed index reaching 79, and the level has changed from "greed" to "extreme greed".

In terms of derivative trading, according to Coinglass data, there were liquidations of $219 million across the entire network in the past 12 hours, with long positions liquidated at $25.6277 million and short positions liquidated at $194 million; BTC liquidations amounted to $125 million and ETH liquidations amounted to $33.892 million.

Accumulate steadily and release forcefully? ETF buying effects gradually emerge

Looking at the news, (except for the upcoming halving of longer lines), this round of fluctuations seems to correspond to no dynamic news. Overall, the rise in last night's market seems more like a breakthrough after the adjustment is in place.

According to the market outlook released by Greeks.live yesterday, Bitcoin is currently in a state of "spot bull market driving derivative bull market". The so-called "spot bull market" has actually been evident from the buying power in the market.

Dune data shows that the total amount of BTC held by 10 physical Bitcoin ETFs (including GBTC) as of the time of writing has reached 732,694, corresponding to a total asset management scale of $39.24 billion. After the outflow of GBTC slowed down, the other 9 major ETFs have maintained a positive inflow trend.

What does holding 732,694 BTC mean in the cryptocurrency industry?

Based on a real-time circulation supply calculation of 19.64 million tokens (of which a large number of tokens are no longer in circulation due to loss and other issues), this means a circulation ratio of 3.73%.

From the reserve status of major exchanges, Binance's February reserve certificate shows that as of February 1st, Binance's net BTC balance for users was 594,688, and the platform's net BTC balance was 609,477; OKX's 16th reserve certificate shows that the net BTC balance for OKX users in February was 135,969, and the platform's BTC balance was 140,086. Therefore, it can be seen from the comparison that the ETF, which was just approved a month ago, has approached the total sum of BTC holdings of the two major exchanges, Binance and OKX.

Other than buying pressure from ETFs, there are also some institutions/whales that are increasing their purchasing power, either openly or secretly.

Tree News reported that data shows that from February 15th to February 25th, MicroStrategy and its subsidiaries once again purchased approximately 30,000 bitcoins for about $155.4 million.

HODL15Capital also noticed the buying action of a mysterious whale. Previously, a certain mysterious address named Mr. 100, who bought about 100 BTC in a single day multiple times, increased its holdings by 405 BTC on February 24, currently holding about 46,370 BTC, equivalent to 2.37 billion US dollars. HODL15Capital emphasized that this is not an ETF address, because the address already held about 40,000 BTC before the ETF was approved.

As buying pressure increases, selling pressure from miners has been decreasing. According to a recent report from CryptoQuant, the amount of BTC sold by miners daily in the past few weeks has been less than 100, which is a sharp contrast to the situation in November to December 2022 where daily sales were 1000 BTC or more.

Bitcoin's Flourishing Ecosystem

除了宏观层面的供需变化之外，Bitcoin's ecosystem has recently seen an accelerating development trend.

Bitcoin Layer 2 networks or compatible networks, including Merlin Chain, BounceBit, and B² Network, have grown to 25 (according to DWF Ventures' statistics this month), with some projects having secured significant financing and others accumulating considerable TVL amounts.

Although currently, the direct stimulating effect of major Bitcoin ecological projects on BTC prices is still limited, as a new attempt to expand BTC utility, the further development of such projects in the long run will also benefit the price performance of BTC.