Author: Crypto_Painter (X: @CryptoPainter_X)
The Current Bull Market:
1. Slow rise, lacking the profit effect seen in previous bull markets;
2. Poor liquidity, with most high market cap altcoins besides BTC not reaching new highs;
3. Lack of traffic, with social media attention far lower than in past bull markets;
Let’s systematically discuss these 3 points.
1. Is the current bull market rising slower than previous ones?
Is it a matter of technical analysis to judge whether this bull market is rising fast or slow? When it comes to the momentum of price increases, it’s not just about the speed of change, but also about sustainability.
For example, if a bull market takes 1 year to complete, and for the first 11 months of that year, the market fluctuates at low levels, but then in the last month it experiences a 300% increase before peaking and entering a bear market, would you still call this a bull market?
Even though the last month saw a rapid increase, this kind of market does not represent sustained demand in the market; rather, it is more indicative of market manipulation, commonly seen in low market cap altcoins where the goal is simply to raise prices for selling purposes.
Therefore, for BTC, what we need to see in a bull market is one with long-term sustainability, where buying pressure continues to emerge, leading to a gradual increase in price. This structure corresponds to sustained demand, reflecting genuine buying, holding, and long-term investment processes.
We can analyze the price acceleration of each bull market from 3 dimensions:
– Duration of the bull market
– Increase in price brought by the bull market
– Momentum within the bull market
As shown in the charts:
In order to make a fair comparison with the current bull market, I have used the same structural intervals to calculate the average daily percentage increase in prices.
The intervals cover the early stages of a bull market, from the lowest point to just before breaking the previous high and fluctuating near historical highs.
By dividing the price increase during this period by the number of days, we find that the average daily increases in the early trend stages of the last 3 bull markets have been gradually decreasing, at 1.10%, 0.71%, and currently 0.65%.
Even if BTC were to break out to new highs in this bull market, the early trend stage’s rate of increase would still be lower than that of the previous two bull markets. Moreover, if BTC continues to fluctuate, this 0.65% figure will further decrease over time.
Thus, it appears that this current bull market is indeed rising slowly.
Next, let’s examine price momentum:
The following 3 charts correspond to the performance of BTC on the ASR-VC trend indicator after breaking new highs in 2017, 2020, and 2024:
March 2017
December 2020
March 2024
At first glance, one can perceive significant differences.
After breaking historical highs, previous price increases saw varying degrees of deep corrections. However, these corrections did not disrupt the upward trend intensity, as indicated by the green middle track line maintaining an upward trajectory. In contrast, in the current market, the daily level’s green channel middle track appears almost flat, a scenario that has never occurred in history.
Furthermore, after experiencing deep corrections in previous price movements, the second or third tests to historical highs resulted in successful breakthroughs, leading to strong bullish trends. However, the current situation involves multiple failed attempts at breaking out into a strong bullish trend.
Conclusion: From this perspective, the early trend stage of the current bull market is significantly weaker in trend momentum compared to the previous two bull markets.
Although this does not necessarily mean that the current bull market has peaked, from an overall structural perspective, the foundation of this bull market is weak, with insufficient sustained demand leading to prolonged oscillations near previous highs.
So, what are the reasons for this weak foundation?
Let’s now compare from a liquidity perspective!
2. Is the overall liquidity of this bull market worse than in previous bull markets?
Although the overall liquidity level does not directly reflect price movements, it does determine the upper limit of price rallies.
Observing the overall liquidity levels in the cryptocurrency market is mainly done through on-chain liquidity and off-chain liquidity.
On-chain liquidity generally refers to assets that have been exchanged for stablecoins or cryptocurrencies through fiat currency, reflected by the total market value of stablecoins.
Off-chain liquidity typically refers to global liquidity, specifically represented by net dollar liquidity, reflected by the Federal Reserve’s balance sheet minus a series of dollar financial accounts’ deposits.
First, let’s look at on-chain liquidity, i.e., the market value of stablecoins during the last two bull markets. Starting with USDT since USDC and DAI appeared later:
To align with the current market pace where BTC is poised to break previous highs, let’s compare the market value of USDT during the previous bull market at the time of the historical high, and the current market value of USDT as the bull market is about to break historical highs:
As seen in the chart, before the last bull market completely broke the $20,000 mark, the market value of USDT increased by $18.7 billion compared to the market value at the peak of the 2017 bull market. In other words, when prices returned to the same level, USDT had increased by $18.7 billion.
This additional $18.7 billion in liquidity laid the foundation for the early stages of the last bull market. Considering the difference in BTC prices, we also need to consider the increase in USDT market value during this period, which shows a 1680% increase before the last bull market completely broke historical highs.
Now looking at the current bull market, under similar conditions, the market value of USDT has grown by $38.5 billion, but the increase is only 52.16%. Although the total market value is higher in the current market, BTC prices are significantly different.
In other words, because of the different historical highs for BTC, the required liquidity for a breakout is inevitably different.
Let’s simplify this with a price ratio calculation:
$69000 / $20000 = 3.45
$18.7 billion x 3.45 = $64.5 billion
This means that for the current bull market to achieve a breakout similar to the previous one, USDT’s market value needs to be $64.5 billion higher than the peak level of the last bull market.
In other words, the additional $38.5 billion currently added to the market is insufficient, indicating that the overall liquidity of this bull market is also inadequate compared to the previous one.
You might say, “Excluding other stablecoins, isn’t this misleading?”
Okay, let’s calculate the performance of the three major stablecoins, USDT, USDC, and DAI, along with the net inflow of BTC spot ETF:
As shown in the chart, not only have USDC and DAI been included, but also the net inflow of BTC spot ETF, indicating that the on-chain liquidity in the current bull market has indeed increased significantly, reaching $509 billion.
Thus, the current bull market’s overall liquidity is not enough compared to the previous one.
In summary, the current bull market is characterized by a slow rise, weakened trend momentum, and insufficient liquidity, indicating a shaky foundation. This analysis provides insights into the challenges and dynamics of the ongoing market environment.The current bull market has reached $220 billion in liquidity. To compare with the previous bull market at the same ratio: $220 billion x 3.45 = $759 billion. However, the current accumulation of liquidity in this bull market is only $509 billion. Therefore, to replicate the previous bull market’s breakout above the previous high and directly surpass it after a few weeks of oscillation, at least an additional $250 billion in liquidity is needed.
It is evident that the lack of this $250 billion is causing the current bull market to struggle near the previous high for a whole quarter. The current liquidity accumulation is indeed insufficient. The key lies in whether liquidity can continue to increase. If Stablecoins + ETFs + Hong Kong ETFs bring in liquidity incrementally above $200 billion during the next 3 months of oscillation, then we can easily break through the historical high and move away from this stagnant range.
However, the current situation is not optimistic. The increase in Stablecoins has stalled, and the net inflow of ETFs, after a brief surge last week, remains uncertain if it can sustain continuous inflows. The chart below shows the market value trend of Stablecoins and the weekly net inflow levels of ETFs over the last three months.
It is apparent that the growth in the total market value of Stablecoins has significantly slowed down. The possibility of a direction change is high. A decrease in Stablecoin market value outflow could pose a significant threat to this bull market. Despite the lack of new liquidity from Stablecoins, the recent recovery in ETF net inflows has led to a gradual rebound in the price of BTC.
The current focus should be on whether the market value of Stablecoins can move in a new direction. If it trends upwards, it indicates a positive macro-economic data, allowing BTC to break through the current range with sufficient additional liquidity. Conversely, a downward trend could result in prolonged oscillation and retracement.
In conclusion, this bull market is different from previous ones. Moving too fast initially has led to a need to exchange time for space. If we can maintain the current range for a sufficient period and continue to increase liquidity, we can still achieve a breakthrough. If the range is accidentally breached, and liquidity starts to decrease, the bull market may end prematurely.
Moving on to external liquidity, specifically the net flow of USD, a comparison is made in the graph below. In the previous bull market, external USD net flow increased by $14.33 trillion, a 33.25% increase when breaking the historical high. Contrastingly, in the early stages of the current bull market, there was a decrease of $8.571 trillion, a 12.22% decline.
This explains why the internal liquidity accumulation in the current bull market is not as strong as in the previous one. Despite the poor external environment, the overall performance of the USD net flow curve has been slowly increasing over the past year.
Despite the challenging external conditions, BTC has still managed to achieve new highs. The trust and favorability of traditional capital towards BTC have reached a new level, with a potential flow ratio of 8.9% compared to the previous bull market.
The article then discusses the decline in social media attention towards BTC in the current bull market compared to previous ones. Although the data shows a decrease in viewership and interest, the potential for a strong rally in BTC’s price could bring back dormant investors.
In conclusion, this bull market differs from past ones in terms of social media attention. BTC has normalized on social media, especially in the increasingly stock market-like market. The attention of retail investors is not as crucial as in previous bull markets.
In conclusion, the complexity of the current bull market compared to previous ones has been thoroughly discussed in this comprehensive response. Writing this nearly 10,000-word response took 12 hours, involving extensive research and analysis. Despite the complexity, the author found satisfaction in the process and gained valuable insights. Thank you for reading!
