(Kitco News) – Bitcoin (BTC) made history on March 5 when it surged to a new all-time high a full 45 days before its next halving, shocking even the most bullish crypto proponents as demand from the new spot BTC exchange-traded funds (ETF) soaked up the available liquidity.
The unprecedented move left many analysts confused as it rendered their previous projections moot, and the ecosystem was abuzz with chatter about “how high will it go?” with some predicting a $100,000 BTC by the time the halving rolls around near April 19.
That has all changed in recent days, however, as Bitcoin plunged below $61,000 in a typical pre-halving pullback, leading analysts to proclaim that all is once again right with the world as Bitcoin is behaving in a manner they are familiar with.
After climbing back above $67,000 late on Wednesday, Bitcoin has spent the majority of Thursday oscillating around this support level as bulls plan out their next run higher while bears plot to foil any breakout attempt and instead smash BTC price back to the low $60,000 range.
BTC/USD Chart by TradingView
While some have suggested that the bull run is over, pointing to Bitcoin’s performance in 2021 and the difficulty in breaking out above the current level as proof, analysts at CryptoQuant say the cycle is just getting started, given the relatively low level of investment flows from new investors and price valuation metrics still below levels seen in past market tops.
According to the latest Weekly Crypto Report from the on-chain data analytics firm, 48% of Bitcoin investment is coming from short-term holders, and the “bull cycle typically ends with 84%–92% of investment” from these new investors.
“The Bitcoin bull cycle is still far from over, as shown by the relatively low level of new investment flows,” the analysts said.
As it currently stands, the level of investment from short-term holders is similar to the levels seen in mid-2019, which was “when Bitcoin also experienced a meaningful correction,” the analysts said, noting that it's a development that short-term traders should watch out for.
A separate metric, the CryptoQuant profit and loss (PnL) index, also shows that valuation metrics are still below levels consistent with past market tops.
“CryptoQuant P&L Index is still outside a market top zone (red area) and above the index’s 1-year moving average,” the analysts said.
While the P&L metric is still below previous market peaks, traders should still take care as the current level is not too far from the peaks witnessed during the 2013, 2017, and 2021 bull runs.
As for the current cycle, market analyst Crypto Tony noted that BTC had a “Nice recovery yesterday, but reclaiming $69,000 is all I care about right now.”
And position trader Bob Lukas said the FOMC decision may have put the floor under Bitcoin’s price, and if it manages to climb back above $70,000, it’s “go time.”
Fairly clean path for #bitcoin.
#FOMC strength could mean lows on 60-day timeframe.
If a move lower still to come, this tag of 10dma is where it turns to lower low. Structurally better if it does for bull market sustainability.
Otherwise close >$70k likely go go go time pic.twitter.com/cIXzVupbyE— Bob Loukas ? (@BobLoukas) March 21, 2024
At the time of writing, Bitcoin trades at $66,360, an increase of 3.65% on the 24-hour chart.
