Written by: Nan Zhi, Odaily Planet Daily
Since the Bitcoin spot ETF was approved, the price of Bitcoin has been soaring, and it is only one step away from the 100,000 mark. However, in this bull market, only Bitcoin has risen so far, and the proportion of Bitcoin in the total market value of the crypto market has been rising steadily.
Will the alt season come? Or is 100,000 Bitcoin the peak of the bull market? We compared data from the past four years to answer this question.
Basic information
Data Source
The data involved in this article include ① Bitcoin price, ② Bitcoin contract rate, ③ Bitcoin contract transaction volume, ④ Bitcoin contract active purchase transaction volume, ⑤ stablecoin total market value, ⑥ crypto market total market value, ⑦ Bitcoin total market value, ⑧ Nasdaq transaction volume, etc.
Among them, the contract prices in ① come from Binance, and the spot prices come from CoinGecko; data ②-④ come from Binance contracts; ⑤, ⑥, and ⑦ come from CoinGecko and DefiLlama; ⑧ comes from Yahoo Finance.
Chart Highlights
This article aims to qualitatively explore the stages of market development rather than quantitatively analyze. Therefore, to improve the readability of the charts involved in this article, the charts are drawn using Origin, and all data except the 'stablecoin market value' has been smoothed (parameters are Savitzky-Golay smoothing, window size 30, 2nd degree fitting, with a high degree of smoothing; readers are advised to focus only on trend changes, and any specific numbers that need to be highlighted will be pointed out directly in the text).
Looking back, what data indicates the arrival of the peak?
Funding Rate
The funding rate is 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, and the relationship between the Bitcoin funding rate and Bitcoin price is shown in the figure below:
From this, we can see a very significant rule: the peak price and extreme fee rates co-exist, and extreme values of fee rates often appear before the price peaks. The three extreme values of the fee rate appeared in early January, mid to late February, and mid-April, corresponding to prices of 40000, 45000, and 60000 USD respectively.
However, it should also be noted that a high fee rate does not necessarily mean an absolute peak; the rising fee rate is more evident in the early stages of a bull market.
The Bitcoin fee rate and trend from the end of 2023 to April 2024 are shown in the figure below:
It can be seen that the market around 2024 has become significantly 'calmer'. Although Bitcoin has reached a new historical high, the fee rate has not broken through the 0.1% mark again (the maximum occurred on March 5 at a price of 66839 USDT). However, we also see that the fee rate reached its peak ahead of the price peak.
Active Buy Transaction Volume
Here we selected the active buy transaction amount of Bitcoin contracts on Binance as the research object, also choosing January to May 2021 as the research period. It can also be clearly seen that this indicator is a 'lagging indicator' or 'contrary indicator'.
The peak of active buy transaction volume often lags behind the price peak. At the same time, during the process of the price peak falling, the active buy transaction volume rises faster, indicating that in 2021, users preferred to actively buy the dip during a decline.
The data from the end of 2023 to April 2024 is as follows. Interestingly, this indicator has again become a 'leading indicator'. The active buy transaction volume appears simultaneously or slightly earlier than the price peak, with greater volatility and significance, and is expected to become an effective reference indicator.
Circulating Market Value of Stablecoins
In the 2021 bull market, the Federal Reserve's unlimited QE and the influx of hot money from outside accelerated the issuance of USDT, speeding up the bull market process. We first reviewed the total market value of USDT and the total market value of cryptocurrencies from 2021 to 2023 as follows:
It can be seen that stablecoins have no correlation with small-scale trends; it is necessary to expand the perspective to the yearly level to show some correlation.
Bitcoin Price and Altcoin Season
The Bitcoin price, Bitcoin market value, total market value of altcoins, and market share over the past 4.5 years are shown in the figure below:
Looking solely at 2020 and 2021, when Bitcoin initiated its first wave, the market share of altcoins sharply declined, then quietly turned around in early 2021; as Bitcoin rose, the share of altcoins increased.
Returning to the present, Bitcoin has already completed the first and second waves of initiation, but the decline in altcoin share is not rapid, and there are no obvious signs of bottoming and rebounding yet.
It is difficult to seek certainty from trends, but from absolute values, the two key market shares of 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%, which is not far from the most recent starting point.
Market Activity
Last week, on-chain analyst @ai_ 9684 xtpa posted on platform X, stating: 'Since Binance launched the GOAT contract at the end of October, it’s evident 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 was 10% higher than Nasdaq, 2 times 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 it is, then ask what it is — has the market transaction volume reached a historical peak? Our data review shows that on November 12, the Bitcoin contract trading volume set the fourth highest record in the past four years (the top three occurred on March 5, August 5, and February 28, 2024), while the fifth highest point was on May 19, 2021.
Does the peak transaction volume mean the market top? The data from the past four years is shown in the figure below:
It can be seen that only three peaks exceeded 30 billion USD, and the first two occurred near the peak.
(Note: The peak transaction volume is actually 50 billion - 60 billion USD; the extreme values have been smoothed here.)
What stage are we in?
In summary, the fee rate, 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 currently in?
The fee rate is shown below, and it can be seen that the fee rate is currently still at a low point, far from this year's March, 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.
