Bitcoin has a reputation for experiencing wild price swings, and the sharp price increases that characterize bull markets can be exciting and intimidating. On one hand, investors can make significant profit in just a few days. On the other hand, the rapid ascent can trigger a fear of missing out, leading traders to make impulsive decisions that can negatively impact their bottom line. This article will help you sort through the noise by offering valuable insights through reliable bitcoin indicators to assess the current Bitcoin bull run, including whether it will continue, supported by ETF inflows and on-chain data insights.
Bitcoin Magazine Pro's solution, Bitcoin analysis, is a valuable tool for achieving objectives such as understanding whether the Bitcoin bull run will continue, supported by ETF inflows and on-chain data insights so that you can make informed decisions about your investments.
Is the Bitcoin Bull Run Over? BTC Dips Below $65K
Bitcoin dropped below $65,000, hitting $64,519 after a 1.65% dip in the last 24 hours. Just a day earlier, Bitcoin traded at $66,000, sparking excitement across the Bitcoin community and fueling hopes for an imminent bull run.
What’s Behind This Drop?
Several possible reasons could explain this sudden downturn. Profit-taking is common when an asset reaches a new milestone, especially after prolonged bullish momentum. Moreover, Bitcoin's recent price surge coincided with broader macroeconomic developments that could impact investor sentiment and expectations.
The U.S. Bureau of Economic Analysis (BEA) reported on Sept. 29 that the country’s gross domestic product (GDP) grew by 2.1% in the second quarter of 2023. While this wasn’t bad news for financial markets, it was a downward revision from earlier estimates of 2.4%. The Bitcoin market is likely reacting to news that the U.S. Securities and Exchange Commission (SEC) delayed its decision on a Bitcoin spot exchange-traded fund (ETF) yesterday.
What Could This Mean for Investors?
Despite the dip, on-chain analytics platform Santiment notes that there is still a lot of optimism in the market. In a post on X (formerly Twitter), the firm said, “If you’re awaiting Bitcoin’s new all-time high, it may need to wait until the crowd slows down their own expectations.”
In its latest post, Santiment emphasized that there are now approximately “1.8 bullish posts toward BTC for every one bearish post,” reflecting the ongoing optimism despite recent market downturns. Jameson Lopp, Chief Security Officer at Casa, further confirmed this. "Bitcoin sentiment is shifting positively in mainstream media as FUD fails to withstand the test of time.” Drawing parallels to past performance, Santiment added, “Markets historically always move the opposite direction of crowd’s expectations.”
Are Technical Indicators Painting a Different Picture?
While discussions suggest that Bitcoin may take time to reach a new all-time high, technical indicators paint a more nuanced picture. The Relative Strength Index (RSI) sits above the neutral zone at 59, reflecting a bullish sentiment.
It’s worth noting that the RSI has been trending downward since September 29th, signaling a potential trend reversal. This cautious outlook is further supported by the Bollinger Bands, which have widened, indicating increased volatility and possible shifts in market sentiment.
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Bitcoin ETF Inflows Surge past $1 Billion, Sparking Bull Run Speculation
ETF inflows have surpassed $1 billion, signifying a renewed interest in Bitcoin. This milestone is significant because it highlights institutional investors' growing adoption of Bitcoin. The ETF, or exchange-traded fund, approach allows investors to gain exposure to Bitcoin without buying the underlying asset.
This helps ease concerns around security and custody while providing a regulated framework for investment. ETF inflows can be seen as a proxy for investor sentiment. The recent spike in Bitcoin ETF inflows comes as the broader market rallies following the Federal Reserve’s recent interest rate cut. #What's all the fuss about Bitcoin ETFs?
ETF Inflows Surpass $1 Billion: Bitcoin's Institutional Adoption Milestone
Bitcoin ETFs are investment vehicles that allow investors to gain exposure to Bitcoin through the traditional stock market. When a Bitcoin ETF is launched, it will start with a certain amount of Bitcoin in its reserves. The fund will then track the price of the asset and issue shares to investors that represent a claim on the Bitcoin held in the fund.
As investors buy and sell shares of the ETF, the price of the shares will fluctuate with the price of Bitcoin, allowing investors to profit off any price movements without ever having to buy the underlying asset. ETFs are regulated products and can help ease concerns around security and custody that often accompany buying Bitcoin directly. For these reasons, Bitcoin ETFs have become a popular way for institutional investors to gain exposure.
Renewed Institutional Interest in Bitcoin and the Impact of ETF Inflows and Market Conditions
The recent surge in Bitcoin ETF inflows, following a period of slowed growth in late August and early September, signals renewed institutional interest in Bitcoin and aligns with a broader market rally potentially fueled by the Federal Reserve’s recent interest rate cut. Spot Bitcoin ETFs in the U.S. saw heightened demand this week, attracting over a billion dollars from investors.
This continued inflow signifies increasing institutional demand for the funds, which have pulled a combined $18.8 billion in total net inflow since their debut in January. According to SoSoValue data, spot Bitcoin ETFs witnessed a total net inflow of $494.27 million on September 27, a notable jump from the previous day’s $365.57 million.
Strong ETF Inflows Signal Growing Confidence in Bitcoin Market
Ark Invest and 21Shares’ ARKB led the 12 funds for the second consecutive day with $203.07 million in net inflows, as Fidelity’s FBTC and BlackRock’s IBIT, the largest Bitcoin ETF by net assets, attracted $123.61 million and $110.8 million respectively. Even Grayscale’s GBTC, experiencing outflows, pulled in a surprise inflow of $26.15 million on Friday. Notably, none of the Bitcoin ETFs experienced outflows during this period. Cumulatively, the funds have attracted $1.1 billion in weekly net inflows, a strong performance buoyed the Bitcoin price over the past seven days. At the time of writing, the asset traded at $65,581 after gaining 5% in the past week, CoinMarketCap data shows.
What does this mean for the Bitcoin market?
The recent spike in Bitcoin ETF inflows has fueled speculation of a potential Bitcoin bull run as we head into Q4 2024. On Friday alone, $495 million flowed into Bitcoin ETFs, with over 17,009 BTC bought in just one week!
Strong demand from institutional investors has sparked hopes of sustaining Bitcoin's recovery. The appetite for spot Bitcoin ETFs has grown significantly, backed by high trading volumes. Ark Invest’s ARKB attracted over $203 million in inflows on Friday, leading the market.
Surging Demand from ETFs and MicroStrategy Drives Bitcoin Price Growth
Fidelity’s FBTC followed with $123 million, and BlackRock’s IBIT saw $111.7 million, according to data from Farside Investors. These three funds snapped up 6,661 BTC in a single day. This demand far exceeds Bitcoin’s daily production of about 450 BTC. In addition to the 17,000 BTC scooped up by ETFs, MicroStrategy purchased another 7,000 BTC this week, adding to the supply shortage.
As a result of this heightened demand, Bitcoin’s price has been climbing steadily, gaining 5% over the past week. Bitcoin trades at $65,656.40, with a market capitalization of $1.305 trillion. Investors are eagerly positioning themselves in anticipation of a potential Bitcoin bull run in the fourth quarter of 2024.
BlackRock’s Aggressive Buying Strategy
BlackRock, the world’s largest asset manager, has increased its Bitcoin holdings. The company sees Bitcoin as a long-term asset and a hedge against inflation. According to recent SEC filings, BlackRock has steadily boosted its Bitcoin holdings through its spot Bitcoin ETF, IBIT.
In a recent portfolio update, BlackRock reported holding 198,874 IBIT shares as of July 31, up from 43,000 in June. With over $21.3 billion in inflows since its launch just nine months ago, BlackRock’s Bitcoin ETF continues to dominate the market. This aggressive accumulation highlights growing institutional confidence in Bitcoin and sets the stage for potential price gains in the months ahead.
Key Bitcoin On-Chain Metrics Indicating Recovery
On-chain metrics are valuable tools for understanding Bitcoin's price movements. Simply put, they are data points derived from the Bitcoin blockchain itself. Investors can gauge Bitcoin’s supply and demand dynamics by analyzing these metrics, revealing important information about future price movements. Increasing long-term holders selling their Bitcoin may signal a rising bearish sentiment and an incoming price drop.
If on-chain metrics show that long-term holders are hoarding Bitcoin or short-term holders are selling their coins, this may indicate a bullish trend. By analyzing on-chain metrics, investors can make more informed decisions about their Bitcoin investments.
Bitcoin’s Fund Flow Ratio Points to Recovery
One primary indicator that Darkfost highlights is the 7-day Simple Moving Average (SMA) of the Fund Flow Ratio, which is currently at 0.05. Historically, this level has marked the end of bear markets or the start of new bullish phases. A recent increase in the Fund Flow Ratio hints at rising investor activity on the exchanges, a sign that usually precedes sharp price surges.
Leverage Ratio Signals Increased Confidence in Bitcoin
Another critical recovery metric is the 30-day SMA of the Estimated Leverage Ratio. This metric tracks leverage use in Bitcoin trading. The ratio is trending upward within a support range of 0.15 and 0.175, reflecting increased confidence by market participants. Rising interest in futures ETFs and Bitcoin options trading further confirms increasing leverage.
Long-Term Holders Are Moving Bitcoin Again
Darkfost highlights the 30-day Exponential Moving Average (EMA) of Binary Coin Days Destroyed (CDD). This indicator monitors the activity of long-term Bitcoin holders. A sharp rise in this metric often signals the end of a bear market phase. The long-term holders seem to be positioning themselves for future gains, which could further support Bitcoin’s price in the months ahead.
Historical Trends Suggest a Bullish Breakout
Alongside on-chain data, historical cycle patterns suggest Bitcoin may be on the verge of a breakout. In an X post, pseudonymous analyst Rekt Capital noted that Bitcoin tends to break out from its reaccumulation phase around 154-161 days after a halving event. If this argument stands, a breakout might be near since 157 days have passed since the latest halving.
While historical trends do not guarantee future price movements, Bitcoin behaved similarly in 2016 and 2020. The usually bearish month of September it has surprised many this year, with 9% of the month in green. This marks the second-best September performance for Bitcoin since 2016.
Long-Term Outlook Remains Positive
The long-term outlook for Bitcoin remains positive. It’s unclear exactly when or how big the next price jump will be, but recent data shows Bitcoin could be close to a strong rally. Bitcoin is now just 14.6% below its previous peak of $73,738. The next few days could be important in deciding Bitcoin’s price trajectory. The upcoming U.S. elections will influence market sentiment in the coming months, though experts believe the impact may be minimal. Both candidates have expressed interest, with Trump being more vocal and showing strong support.
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Bitcoin Bull Run Unlikely as Long as Social Sentiment Runs Too Hot
Social sentiment gauges how traders feel about Bitcoin. When posts about Bitcoin are overwhelmingly positive, it indicates that traders are overly optimistic, and a price correction may be around the corner.
What's the Latest on Bitcoin's Social Sentiment?
Social sentiment around Bitcoin is extremely positive. On September 30, on-chain analytics platform Santiment reported that there are currently 1.8 bullish posts about Bitcoin for every bearish post.
This surge in positive sentiment has come as Bitcoin's price rose by about 14% over the last couple of weeks. As corrections often follow excessive optimism, Santiment warned that those hoping for a new Bitcoin all-time high may have to wait until social sentiment cools. "Markets historically always move in the opposite direction of the crowd's expectations," Santiment stated.
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How Long Does a Bitcoin Bull Market Last?
Since its launch, Bitcoin has experienced several bull and bear markets. Bull and bear markets occur with every large price fluctuation, with bull markets signifying rising prices and investor confidence and bear markets representing falling prices and investor pessimism. Bitcoin’s price dynamics have changed, but bull runs typically follow the same pattern and duration. Historical Bitcoin bull runs lasted roughly a year, with key price drivers including market cycles and halving events.
Bitcoin’s first recorded bull market occurred in 2011, when the price jumped from $1 to $31 before falling below $10. The next bull run happened in late 2013 when prices rose from $13 to $1,100. The most recent bull runs peaked in December 2017, when prices hit $20,000, and in late 2020, when Bitcoin reached an all-time high of $69,000 in November 2021.
The Current Bitcoin Bull Market Has Lasted 14 Months So Far
Bitcoin is in a bull market that began in early 2023. The bull market has lasted 14 months, with several indicators suggesting it could have more room to run. Experts note that the current bull market has already outlasted the previous one, which peaked in late 2021 before transitioning into a bear market in early 2022.
The Length of Bitcoin Bull Markets
There has yet to be a consensus on how long the Bitcoin bull run lasts. Jappa, the Blockware CEO, explained that historically, Bitcoin has been in a bear market for one year out of each halving cycle and a bull market for the other three years. But he added that it often requires hindsight before a broad recognition of the moment the market shifts from one phase to another.
For example, Jappa said in early 2022, Bitcoin was in a bear market. But at the time, the euphoria of the 2021 highs, when BTC peaked at $69,000 in November, “had many investors believing it was still a bull market.” Bitget’s Lee said the Bitcoin bull market usually lasts several months to more than a year. He pointed to the bull run of 2020 -2021, saying it lasted from the second half of 2020 to the end of 2021. “The bull market often coincides with the larger cycle of Bitcoin’s four-year halving cycle, and the decrease in supply is usually the catalyst for price increase,” he detailed. Nikzad said BTC bull markets last between 12 to 18 months, while bear markets often extend for longer periods, sometimes over two years.
New Factors May Impact Bitcoin Bull Market Trends
While historical data on Bitcoin bull and bear markets is useful for gauging current market conditions, experts say new factors could impact how the current cycle unfolds. Institutional investment, the macroeconomic climate, and changing market sentiment could all redefine how Bitcoin bull markets operate.
How to Trade in a Bitcoin Bull Market
Bull markets are rising prices that can last a few weeks to several years. They can happen in any market, including:
- Stocks
- Commodities
- Digital currencies
Like Bitcoin. Bull markets often follow a bear market, and investors usually enter the phase with optimism that quickly spirals into euphoria.
Bull markets present opportunities for traders to profit from surging prices. Some traders prefer to take a long position early in a bull market and sell at intervals as prices rise to lock in profits. Others use technical indicators to determine when to exit a position before a market correction.
How to Identify Bitcoin’s Bull Market
Bitcoin’s bull market status can be measured through the following indicators:
- Higher highs and higher lows: Bitcoin consistently forms higher highs and higher lows during pullbacks, signaling upward momentum.
- Moving averages: A bullish trend is often indicated when the 50-day moving average exceeds the 200-day moving average.
- Increased trading volume: Strong buying activity and significant volume increases typically accompany bull markets.
- Market sentiment: High investor confidence, driven by news of increased adoption, partnerships, and regulatory clarity, reflects a bullish outlook.
- On-chain metrics: Indicators such as a growing number of long-term holders and decreased exchange balances suggest holders are unwilling to sell. The reverse of all the factors mentioned above applies in a bear market. As far as market sentiment is concerned, the numbers aren’t looking so positive.
How to Maximize the Bitcoin Bull Run
Leverage the Dollar-Cost Averaging (DCA)
Dollar-cost averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price. This approach reduces the impact of market volatility and lowers the average cost per unit over time. On Bitnob, you are offered a seamless way to implement DCA.
The platform allows you to set up recurring Bitcoin purchases, ensuring you consistently invest regardless of market conditions. This automated process helps you stay committed to your investment strategy and take advantage of the bull run without the stress of market timing.
Take Profits Strategically
Set profit-taking targets and stick to them. It’s easy to get caught up in the excitement of a bull run, but having a plan for taking profits can help you lock in gains and avoid potential losses if the market corrects.
Stay Rational
The euphoria of a bull run can lead to irrational decision-making. Stick to your investment plan and avoid making impulsive decisions based on market hype.
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Save 30% on Bitcoin Magazine Pro's Bitcoin Analysis Tool With Our Annual Plan
Bitcoin Magazine Pro offers comprehensive analytics tools to help investors and enthusiasts better understand Bitcoin through data. The platform provides a wide range of free, regularly updated Bitcoin charts, each accompanied by detailed explanations to make complex information accessible.
For those looking to go deeper, paid tiers offer features like:
- Chart alerts
- Exclusive indicators
- In-depth market reports
Whether you're a curious Bitcoin investor wanting to grasp the factors influencing Bitcoin's price or an analyst eager to expand your knowledge, Bitcoin Magazine Pro aims to provide clarity and insights to support more informed decision-making in the Bitcoin space.
Save 30% on Bitcoin Magazine Pro's Bitcoin analysis tool today when you sign up on our annual plan!