Article source: Odaily Planet Daily
Original | Odaily Planet Daily (@OdailyChina)
Author｜Nan Zhi (@Assassin_Malvo)
Since the Bitcoin spot ETF was approved, Bitcoin's price has soared, just a step away from the 100,000 mark. However, so far in this bull market, only 'Bitcoin has risen,' and the proportion of Bitcoin in the total market cap of cryptocurrencies has been steadily climbing.
Will the altcoin season come again? Or is 100,000 Bitcoin already the peak of the bull market? We compared the data from the past four years to answer this question.
Basic Situation Description
Data Source
The data involved in this article includes ① Bitcoin price, ② Bitcoin contract funding rate, ③ Bitcoin contract transaction volume, ④ Bitcoin contract active buy transaction volume, ⑤ total stablecoin market cap, ⑥ total cryptocurrency market cap, ⑦ total Bitcoin market cap, ⑧ Nasdaq transaction volume, etc.
Where the contract prices in ① are from Binance, and spot prices are from CoinGecko; data ②-④ comes from Binance contracts; ⑤, ⑥, ⑦ come from CoinGecko and DefiLlama; ⑧ is from Yahoo Finance.
Chart Highlights
This article aims to qualitatively explore the stages of market development rather than quantitatively analyze. Therefore, to enhance the readability of the charts, the charts used in this article were drawn with Origin, and all data except for 'stablecoin market cap' has been smoothed (parameters are Savitzky-Golay smoothing, window size 30, 2nd order fitting, with a high degree of smoothing; readers are advised to focus solely on trend changes, and any specific numbers requiring separate attention will be directly pointed out in the text).
Looking back, what data indicates the arrival of a peak?
Funding Rate
Funding rates are undoubtedly one of the most understood and intuitive data points by the public. We first reviewed the first wave of the bull market from January to May 2021, with the relationship between Bitcoin funding rates and Bitcoin prices shown in the figure below:
From this, a very significant rule can be derived: peak prices coexist with extreme rates, and extreme rate values often appear before price peaks. The three extreme values of the rates appeared in early January, mid-February, and mid-April, corresponding to prices of 40,000, 45,000, and 60,000 USD, respectively.
But it should also be noted that a peak in the funding rate does not necessarily mean an absolute peak; rising rates are more pronounced in the earlier stages of a bull market.
The Bitcoin funding rates and trends from the end of 2023 to April 2024 are shown in the figure below:
It can be seen that the market around 24 has clearly 'cooled down' a lot, despite Bitcoin reaching a new all-time high, but the funding rate did not break the 0.1% threshold again (the maximum occurred on March 5, with a price of 66839 USDT). However, we also see that the funding rate reached its peak before the price did.
Active Buy Transaction Volume
Here we selected the active buy transaction volume of Bitcoin contracts on Binance as the subject of study, also choosing January to May 2021 as the research period. It is also clear that this indicator serves as a 'contrary' or 'lagging indicator.'
The peak of active buy transaction volume often lags behind the price peak, while during the decline at the peak, the active buy transaction volume rises faster, indicating that users in 2021 preferred to bottom out during declines.
The data from the end of 2023 to April 2024 is shown below. Interestingly, this indicator has once again become a 'leading indicator,' with active buy transaction volume appearing simultaneously or slightly ahead of price peaks, and the volatility is greater and more significant, likely to become an effective reference indicator.
Stablecoin Circulating Market Cap
In the bull market of 2021, the Federal Reserve's unlimited QE led to an influx of hot money from outside, driving Tether to issue USDT crazily, accelerating the bull market's progress. We first reviewed the total market cap of USDT and the total market cap of cryptocurrencies from 2021 to 2023 as follows:
It can be seen that stablecoins have no correlation with small-scale trends; the perspective needs to be broadened to the yearly level to exhibit some correlation.
Bitcoin Price and Altcoin Season
The past 4.5 years of Bitcoin price, Bitcoin market cap, total altcoin market cap, and market share are shown in the figure below:
When comparing 2020 and 2021, during the first wave of Bitcoin's rise, the market share of altcoins sharply declined, only to quietly reverse at the beginning of 2021, with the higher Bitcoin rose, the higher the share of altcoins.
Returning to the present, Bitcoin has completed its first and second waves of initiation, but the decline in altcoin market share is not rapid, and there are no obvious signs of bottoming out or rebounding yet.
In terms of trends, it is difficult to carve a boat to seek a sword, but from absolute values, the two key market shares in the last bull market were 30% at the lowest point in early January 2021 and 40% in mid-February 2021. The current value is 46%, not far from the most recent starting point.
Market Activity
Last week, on-chain analyst @ai_9684_xtpa posted on platform X, stating: 'Since the launch of the GOAT contract on Binance at the end of October, it has been clearly felt that Binance's attitude towards Memecoins has begun to change. In the past 30 trading days (2024.10.07 - 11.15), Binance's trading volume has exceeded Nasdaq by 10%, is double that of the New York Stock Exchange (NYSE), and 16 times that of Coinbase, accounting for about 50% of the global centralized exchange trading volume.'
First ask if, then ask what—has the market transaction volume reached a historical peak? Our data review found that on November 12, the Bitcoin contract trading volume set the fourth highest record in four years (the top three occurred on March 5, August 5, and February 28, 2024), while the fifth highest was on May 19, 2021.
So does a peak in transaction volume mean a market top? The data from the past four years is shown in the figure below:
It can be seen that there have only been three peaks that exceeded 30 billion USD, with the first two occurring near the peak.
What stage are we in?
In summary, funding rates, active buy transaction volume, and total transaction volume are leading indicators of the market. The total transaction volume has issued a warning; what stage are the other two indicators in now?
The funding rates are shown below; it can be seen that the current rates are still at a low point, far from the peak in March this year, let alone the crazy phase of 2021.
The active buy transaction volume is shown in the figure below; this indicator also set a historical high on November 21.
