Original title: Ten thousand words long article: Is this bull market more complicated than previous bull markets?
Original author: @CryptoPainter_X
This bull market:
1. The growth is slow and does not show the money-making effect of the past bull market;
2. Poor liquidity. Most of the high-market-cap altcoins except BTC have not reached new highs.
3. Lack of traffic, social media attention is much lower than in previous bull markets;
Let’s talk about these three points systematically:
1. Is this bull market growing slower than previous bull markets?
How to judge whether this round of bull market is rising fast or slow? This is a technical issue. The momentum of price increase is not simply based on the speed of change, but on its sustainability.
For example, assuming that a bull market takes one year to complete, then if this bull market fluctuates at a low level in the first 11 months of this year, but rises by 300% in the last month, and then peaks and enters a bear market, would you call this a bull market?
Although the price rose very fast in the last month, this kind of market situation does not represent the continuous demand in the market. It can only be regarded as the main operation, which is more common in the market of small-cap altcoins. This kind of bull market has only one purpose: to increase shipments;
Therefore, for BTC, the bull market we need to see is a long-term process with long-term sustainability, continuous buying, and rising prices. This structure corresponds to the long-term strong demand, indicating that people are truly buying, holding, and holding for a long time.
We can analyze the price growth rate of each bull market from three dimensions:
They are: the duration of the bull market, the gains brought by the bull market, and the momentum of the bull market;
as the picture shows:
In order to make a fair comparison with the current bull market, I will use the same structural range to calculate the average daily price increase;
The corresponding ranges are all the early brewing stages of a bull market, that is, the period from the lowest point to the time when the price just breaks through the new high and fluctuates near the previous historical high;
By dividing the price increase during this period by the number of days it lasted, we can conclude that the rate of increase in the early trend stages of the last three bull markets has indeed been gradually declining, with average daily increases of 1.10%, 0.71% and the current 0.65% respectively;
That is to say, even if BTC immediately breaks out of the bull market and reaches a new high, its rising speed in the early stage of this bull market will always be lower than the previous two bull markets, not to mention that if BTC continues to fluctuate, this 0.65% value will continue to decrease over time;
From this perspective, this bull market is indeed growing slowly.
Next, let’s look at price momentum:
As shown in the figure, the following three charts correspond to the performance of the ASR-VC trend indicator after the BTC price broke new highs for the first time in 2017, 2020, and 2024:
March 2017
December 2020
March 2024
At first glance it seems that one can spot obvious differences;
The previous two times the price broke through the historical high, there were different degrees of deep corrections, but these corrections have one feature, that is, they did not destroy the trend strength of the original upward channel. The green middle line in the figure always keeps going up, while in the current market, the middle line of the green channel at the daily level has almost flattened, which has never happened in history.
On the other hand, it is worth noting that after the deep corrections in the previous two times, the price successfully broke through when testing the previous historical high for the second or third time, thus opening up a new strong bull market. However, the current situation is that there have been multiple consecutive tests without opening up a strong bull market.
Conclusion: From this perspective, the early stage of the bull market we are currently experiencing is far inferior to the previous two bull markets in terms of trend momentum.
Although this does not mean that this round of bull market may have peaked, from the perspective of the overall structure of a bull market, the foundation of this round of bull market has not been laid well, and the demand is not sustained enough, which has led to the long-term fluctuation at the previous high position;
So what is the reason for the weak foundation?
Next, let’s compare from the perspective of liquidity!
2. Is the overall liquidity of this bull market worse than previous bull markets?
Although the overall liquidity level cannot absolutely reflect the rise and fall of prices, the liquidity level can determine the upper limit of price increases;
Observe the overall liquidity level of the cryptocurrency market, mainly through two aspects: on-exchange liquidity and off-exchange liquidity;
On-site liquidity generally refers to assets that have been converted into stablecoins or cryptocurrencies through fiat currencies, which is reflected in the chart as the total market value of stablecoins;
OTC liquidity generally refers to global liquidity, which can be more specifically expressed as net U.S. dollar liquidity, which is reflected in the chart as the Fed's balance sheet minus a series of deposit items in U.S. dollar fiscal accounts;
First, let’s look at the on-site liquidity, that is, the performance of the market value of stablecoins in the past two bull markets. Since USDC and DAI appeared later, we will start with USDT.
As shown in the figure, in order to keep up with the current market rhythm where BTC price is near the previous high and ready to break through at any time, we compared the USDT market value during the previous bull market. They are: USDT market value at the previous historical high and USDT market value before the current bull market is about to break through the historical high;
It can be seen that before the last bull market completely broke through the 20,000 mark, the market value of USDT had increased by 18.7 billion US dollars compared to the market value level when the bull market peaked in 2017. To put it bluntly, when the price returned to the same position, USDT had 18.7 billion more than before;
This $18.7 billion in additional liquidity is the foundation laid in the early stages of the last bull market. Considering that the price of BTC is different from the current one, we also need to pay attention to the increase in the market value of USDT during this period. It can be seen that before the last bull market completely broke through the historical high, the market value of USDT had increased by 1,680%!
Then, looking at the current bull market, under the same conditions, USDT’s market value has increased to $38.5 billion, but the increase is only 52.16%. Note that although the total market value is indeed higher than the previous bull market, the price of BTC is completely different.
In other words, because BTC’s previous historical highs are different, the liquidity required for a breakthrough must also be different;
We simply use the price ratio to convert:
$69000 / $20000 = 3.45
18.7 billion x 3.45 = 64.5 billion
In other words, if the current bull market is to achieve the same breakthrough as the previous bull market, we need the market value of USDT to be 64.5 billion US dollars higher than the peak level of the previous bull market;
In other words, the additional $38.5 billion added to the current market is not enough, and the overall liquidity of this bull market is also insufficient compared to the previous bull market;
You will definitely say, "You don't count other stablecoins, isn't that rogue?"
OK, let’s calculate the performance of USDT+USDC+DAI three major stablecoins and see:
As shown in the figure, I not only added USDC and DAI, but also added the net inflow of BTC spot ETFs. It can be seen that the on-site liquidity in this bull market has indeed increased a lot, reaching 50.9 billion US dollars;
Before the last bull market broke through, the on-site liquidity increased by $22 billion;
If we compare the previous bull market using the same ratio:
22 billion x 3.45 = 75.9 billion
However, the liquidity accumulation in our current bull market is only US$50.9 billion;
75.9 billion - 50.9 billion = 25 billion
In other words, if the current bull market wants to replicate the situation of the previous bull market, which fluctuated near the previous high for a few weeks and then broke through directly, it will need at least $25 billion in liquidity increase;
Obviously, it is precisely because of the lack of this 250 that our current bull market has been fluctuating near the previous high for a whole quarter!
In other words, the liquidity accumulation in this round of bull market is indeed insufficient!
But the question is, without these 250, will we be unable to break through?
I personally think that it is not necessarily the case. The key point is whether liquidity can continue to increase. That is to say, if there are three more months of fluctuations in the future, but during these three months, the incremental liquidity brought by "stablecoin + ETF + Hong Kong ETF" gradually reaches a level of more than 20 billion, then we can smoothly break through the previous historical high and stay away from this disgusting range;
However, the current situation is not optimistic, because the increase of stablecoins has stagnated, and it is still unknown whether the net inflow of ETFs can continue to be sustained after a short-term surge in volume in the past week.
The following chart shows the market value trend of stablecoins and the weekly net inflow level of ETFs in the past three months:
It can be seen that the growth of the total market value of stablecoins has obviously stagnated, and it is likely to start choosing a direction in the future. If the total market value remains sideways, it will be fine. The most worrying thing is that the market value of stablecoins will start to shrink and flow out, which will pose a great threat to this round of bull market;
At the same time, since there is no new liquidity in stablecoins, the net inflow of ETFs has begun to recover in the past month, resulting in a gradual rebound in BTC prices without a significant change in the market value of stablecoins.
You may be curious about why BTC has been trading sideways on weekends. The chart above explains why this phenomenon occurs. Since the stablecoin funds on the exchange have completed the game, the price of BTC is more susceptible to the influence of ETFs, so liquidity will only be restored during the opening of the U.S. stock market.
Therefore, the most important thing to pay attention to at the moment is whether the market value of stablecoins can move in a new direction. If it moves upward, it must be due to some long-term positive macro data. Then, BTC will be able to officially break through the current range when additional liquidity is gradually sufficient.
If it goes down, it will inevitably lead to longer-term shocks and corrections. To put it bluntly, BTC is currently breaking through the levels too fast. It has come to the BOSS (historical high) and found that it cannot defeat it. It must recharge another 25 billion US dollars to enhance its combat power. BTC, unwilling to give up, chooses to fight monsters and level up at the door of the BOSS room until it recharges enough money and then launches the final challenge;
Conclusion: This round of bull market is indeed different from the previous bull markets. The previous period was too fast, so now we can only use time to exchange space. If we can maintain the current range long enough and the liquidity continues to increase, we will eventually be able to break through. If we accidentally fall below the range and the liquidity begins to shrink and outflow, the bull market is likely to end early.
Now that we have mentioned the macro, let’s talk about OTC liquidity, or net U.S. dollar liquidity.
As this part involves too many macro contents, I can only make a simple comparison, as shown in the figure:
We still use a similar comparison method as on-site liquidity, and we can see that when the last bull market finally broke through the previous historical high, the net liquidity of US dollars in the external environment had increased by 1433 billion US dollars, reaching an increase of 33.25%;
In the early stages of this bull market, not only did external US dollar net liquidity not increase, but it also shrank by US$857.1 billion, a decrease of 12.22%.
This seems to explain why the accumulation of liquidity in the current bull market is far less than that in the previous bull market. Obviously, the external environment is not a state of abundant liquidity.
But even so, if we look closely at the blue net liquidity curve of US dollars, the overall performance in the past year is fluctuating upward. In other words, although the overall liquidity is insufficient, at least in the past year it has been in a state of slow growth;
And BTC still reached a short-lived high in such a harsh external environment. To be honest, if the proportion of liquidity diverted from the US dollar to BTC in the past bull market was only (220/14330) 1.5%, the diversion ratio in the current bull market may have reached (509/5692) 8.9%!
This means that traditional capital’s trust and favor for BTC has reached a new level!
From this perspective, this round of bull market is indeed different from previous bull markets. The overall environment is very bad and the whole class did not perform well, but BTC can at least rank in the top 5, especially when NVIDIA ranked first in the class, BTC's performance is already very good!
That’s all about liquidity. Another point is about media attention.
3. Compared with previous bull markets, are fewer people paying attention to the current bull market?
Let me first state the conclusion, the answer is yes!
For practitioners or traders in the cryptocurrency industry, it seems that BTC has been the focus of global attention in the past two years, but in fact, at least from a data perspective, the results are disappointing;
As shown in the figure, this is the number of video views of all BTC-related channels on YouTube in the past five years. You can clearly see that the highlight moment of BTC was the bull market in 2021, and in this round of bull market, both the attention and topic popularity are not as high as before!
A sad fact: when BTC broke through the all-time high of 69,000, the popularity on YouTube was not as high as when FTX crashed...
However, if we still compare it according to the previous way when the price broke through the historical high, the data is still much better than in the past. This shows that if the price of BTC can continue to be strong in the future and break through the 100,000 US dollar mark, these long-silent leeks will still come back!
Conclusion: From the perspective of social media, this round of bull market is not much different from previous bull markets. BTC has achieved social media normalization. Especially in the current market that is gradually becoming more like the US stock market, the attention of the majority of leeks is far less important than in the past bull markets.
OK~
The above is the complete answer to the question "Is this bull market more complicated than previous bull markets?" It is indeed a bit too much to type nearly 10,000 words to answer such a question with only 15 words!
It took me 12 hours to write the whole article. During the writing process, I also conducted repeated research, especially on the on-site liquidity. I wrote a lot and found that there was a problem with the comparison logic, so I had to delete it all and recalculate it. I wanted to give up at one point...
However, I really enjoyed the process of drawing and researching. You may not get much useful information after reading this article, especially most of it will be forgotten, but after writing this article, I gained a lot of useful information in the research process, so I am very satisfied!
