Today is Monday, May 20, 2024. The cryptocurrency market has entered a new week, and it has been a month since the Bitcoin halving. I will update some macro news this week, as well as the unlocking of some altcoins.
First, let's look at the trend of Bitcoin. The price of Bitcoin has fallen back a bit. Yesterday, it briefly fell below $66,000. At the same time, the RSI relative strength index below also fell back to the neutral level of 50. I don't think this is a bad trend. Appropriate price correction is always necessary. The RSI has fallen back to the level of a few days ago, but the price is $5,000 higher than before. Bitcoin is not close to being overbought now, so it looks like there is still room for growth. In the past month, we have also been below the MA200 moving average for a long time. On May 15, Bitcoin successfully broke through this moving average. In the past few days, the golden cross has also appeared. The 4-hour MA20 and MA50 moving averages have penetrated the MA200 moving average upward. I think this is a good trend. The average price line of short-term holders has risen to $60,700. It is difficult for Bitcoin to fall below this level again. It is almost impossible to see Bitcoin below $60,000.
As for the Bitcoin futures market, yesterday's price rose rapidly in a short period of time. There was a very big purpose behind this. Now the market trading volume is very low, and it is relatively easy for big players to push up the price of Bitcoin. We saw a short-term airdrop at $67,650. It was liquidated yesterday. After the short orders above were blown up, the price of Bitcoin also fell quickly. It also cleared out the longs in the range above $65,800. If the price of Bitcoin corrects downward again today, the longs at $65,660 will be liquidated. It is unknown how Bitcoin will act in the short term. Considering that today is Monday, the spot ETF market may continue to see net inflows.
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We saw positive inflows of funds in the past five days last week. Grayscale's GBTC also saw inflows for three consecutive days, and it was the first week to experience net inflows. Perhaps this inflow trend will continue this week, especially as there is a backlog of trading demand over the weekend. We will see a price reaction later today, and it is worth noting that the inflow scale of the spot Bitcoin ETF has also reached a new high.
In addition, about 500 days after the Bitcoin halving, the price will generally reach its highest peak, and then we will record the bear market, so I have always emphasized that the Bitcoin bull market has not yet arrived, to be more precise, it should be the second bull market. Of course, if I look at the cycle chart of the glass note, I can clearly see the sideways price trend after the halving, and perhaps this will continue until around October like before, but now there is a spot Bitcoin ETF and the first interest rate cut expected by the Federal Reserve in September, it seems that we have to be more optimistic. The Bitcoin halving has been over for a month, and there are still two or three months at most. We may see a large-scale price increase. I hope everyone will continue to be patient.
Moreover, judging from the performance of historical cycles, the bull market will probably end around October 2025. Of course, we have previously reported that Cryptocoint’s CEO believes that the bull market may end in April 2025, which also shows that 2024 should not be regarded as the time to sell Bitcoin and exit. We need to wait for the arrival of 2025. $100,000 seems to be a price level that many people are concerned about. If Bitcoin reaches $100,000 by the end of this year, some friends will probably choose to sell Bitcoin, but I do not have plans to sell based on the price. I believe more in some indicators on the chain to determine whether Bitcoin should be gradually sold. The price of Bitcoin does not have much reference value.
As for this week’s altcoin unlocks, I’ve already marked them down, including ARB and AVAX token unlocks, which generally means more supply is flowing into the market, which is usually a negative signal for token prices.
The SOP2 ratio of long-term and short-term Bitcoin holders. The blue line seems to be only halfway to the green overheated area above. When it touched the black horizontal dotted line before, the price of Bitcoin also fell back, which is in line with the view that Bitcoin's bull market is halfway through. Later, we will see that the second bull market will push this indicator to the overheated area above. Of course, the next bear market low is also predictable. I can use this chart to illustrate this point. The vertical red column marks the theoretical lowest point of Bitcoin price. I think it is very important to seize this once-in-four-year opportunity to hold a heavy position in Bitcoin. First of all, after the first half of 2015, we saw it at the end of 2018 to the beginning of 2019. At the end of 2022 to the beginning of 2023, we also saw the lowest point of Bitcoin in the bear market again. According to cyclical behavior, the next bear market price low of Bitcoin will probably occur at the end of 2026 to the beginning of 2027.
On the other hand, even after Bitcoin exceeded $70,000, short-term holders had a high profit level, but compared with previous cycles, this was still far from enough. The green area in the figure represents a high profit level. When the Bitcoin bull market comes in the future, we will see that high profit margins will continue for a long time. If we pay attention to the supply share of long-term and short-term holders, the final trend has not yet been formed. Long-term holders have resumed accumulation in the past period of time, so we see that the blue peak has gone higher. What we hope to see is that the blue peak in the figure falls to the bottom. Now the Bitcoin bull market has not yet arrived, and I will not question Bitcoin's performance in the coming year.
In addition, yesterday I mentioned that the funding rate in the Bitcoin futures market can reflect market investor sentiment. Now we have not recovered. Retail investors are not interested in the current market. The Google search index for the keyword Bitcoin is now also It has fallen back to a lower level. When many people temporarily leave the market and no longer actively pay attention to Bitcoin, this is often a good opportunity to accumulate Bitcoin. Judging from the situation of the last bull market, what I am talking about here is the liquidation of the futures market. Data, we can see the relationship between the black line of Bitcoin price and long-term and short-term futures market liquidation. During the stage of significant changes in Bitcoin price, long-term liquidation activity also increased significantly.
Especially when the price of Bitcoin reaches a peak or trough, in the bull market in the first half of 2021, when the price of Bitcoin reached a historical high, the number and proportion of long-term liquidations basically showed a sharp increase. This shows that in the process of forming the bull market price high, speculative buying behavior increased, resulting in many futures positions being forced to close when prices fell back. Even though we have seen many liquidations in the past, it is still incomparable to the level of the bull market. On the one hand, Bitcoin has become more resilient, and on the other hand, a large-scale bull market has not yet arrived.
Finally, I would like to take a look at the news worthy of attention this week. Before that, I think whether the spot Ethereum ETF is approved should be closely watched this week. We will obviously see news of rejection. After the SEC rejected the spot Ethereum ETF, I think it will have a short-term impact on the market. However, there is another interpretation. As some friends discussed in the comment area, this has been digested by the market in advance. After the news comes out, it may mean that the bad news is over and Ethereum has the opportunity to achieve price increases. The short-term trend is difficult to predict. We need to pay attention to what will happen around May 23.
As for the macro news this week, there seems to be no important economic data, but some Fed officials will give speeches this week and they will also be interviewed by the media. We need to pay attention to what they will say. Some important economic data in May basically drove up the price of Bitcoin. The most impressive ones were the non-farm data at the beginning of this month and the April inflation CPI announced last week. The timing of the Fed's interest rate cut has always been a topic of discussion.
We will certainly see interest rate cuts this year, but there seems to be a big disagreement on whether to cut once or twice. The best case scenario is to see two interest rate cuts, that is, one in September this year, and then another rate cut after the US presidential election in November. Lower interest rates will expand borrowing demand because borrowing costs become lower, and funds seeking fixed savings returns will begin to flow into risky markets and seek higher return opportunities again. Overall, market liquidity will improve, and the price of Bitcoin will naturally benefit.
