5 data points suggest a crypto bull market began in 2023 — What’s next for 2024

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Increasing optimism for the approval of a spot Bitcoin ETF, the upcoming BTC halving and positive market sentiment suggest that a crypto bull market started in 2023.

While 2023 started with little hope of a revival in the crypto market, the events of the year have surprised most market participants with a surge in the price of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and many other altcoins.

The period of high volatility in the crypto market appears to be gathering momentum with a bull run expected in 2024.

The global crypto market cap is $1.69 trillion, up 112% over the last 12 months. The increase has been accompanied by 154% and 93% leaps in the prices of Bitcoin and Ether respectively.

The increase has been particularly striking in some altcoins such as Solana and Avalanche (AVAX) which have increased by 880% and 250% respectively over the same period.

The primary factors promoting the spike in crypto prices are rising hopes of a spot Bitcoin exchange-traded fund (ETF) being approved, the successful Shanghai upgrade for the Etheruem network, and the Bitcoin halving event which is less than 180 days away.

Increasing odds of a spot Bitcoin ETF approval 

The conversation surrounding Bitcoin ETFs in the United States continues to gain momentum.

According to Bloomberg’s ETF analysis, the chances of a spot BTC ETF approval by Jan. 10 – which is the United States Securities and Exchange Commission’s final statutory deadline for a decision on some of the applications – is 90%.

Okay, we’re nearing in on deadline dates for 3 spot #Bitcoin ETF applications. I want to get ahead of it because there’s a pretty good chance we’ll see delay orders from the SEC. Delays WOULD NOT change anything about our views & 90% odds for 19b-4 approval by Jan 10, 2024 pic.twitter.com/LE7sOlHAHM

— James Seyffart (@JSeyff) November 14, 2023

If approved, such an ETF could attract more institutional investors into the space and positively impact not only BTC but also the prices of other cryptocurrencies.

A spot Bitcoin ETF approval could be the biggest development on Wall Street in three decades, according to Bitcoin advocate Michael Saylor.

The $BTC Spot ETF may be the biggest development on Wall Street in the last 30 years. My discussion of #Bitcoin in 2024, Spot ETFs vs. $MSTR, and the emergence of bitcoin as a treasury reserve asset with @KaileyLeinz on Bloomberg @Crypto. pic.twitter.com/QtPdBOhMDr

— Michael Saylor⚡️ (@saylor) December 19, 2023

All cohorts of investors have been accumulating Bitcoin

Significant Bitcoin stakeholders are showing confidence in BTC by increasing their holdings. On-chain data from Glassnode have revealed a trend reversal, wherein long-term holders remain bullish on the prospects of a Bitcoin bull run and as a result they continue to add to their holdings.

The Bitcoin hodlers’ balance is an excellent indicator for measuring market cycles. Currently, long-term holders are still accumulating, as they did in previous pre-bull markets.

https://t.co/qWhryCeM0D pic.twitter.com/fREwfFJziD

— IntoTheBlock (@intotheblock) December 27, 2023

Tracking long-term holders’ balances has been a strong indicator of local price tops and bottoms. In every market cycle, there has been a clear accumulation of holders until a local price peak emerges and holders begin to sell in large volumes to realize gains.

More importantly, Bitcoin “whales,” or entities with at least 1,000 BTC, are showing signs of accumulation, which has historically preceded big rallies.

According to a report released by the blockchain intelligence platform Glassnode on Nov. 27, Bitcoin’s Accumulation Trend Score is currently 1 (chart below), indicating that on aggregate, larger whale entities, which are a big part of the network, are accumulating.

Bitcoin: Point-in-time accumulation trend score. Source: Glassnode

One of the renowned whales, business intelligence firm MicroStrategy, continues to add to its Bitcoin holdings after buying an additional 14,620 BTC at an average price of $42,110 percoin, bringing its total holdings to 189,150 Bitcoin.

#Microstrategy‘s latest purchase of $615M in #Bitcoin caused some euphoric waves among traders. Now holding over $8B worth of #crypto‘s top asset, we see that recent purchases and positive news relating to the firm have led to #bullish market movement. https://t.co/lxuqYuMLw6 pic.twitter.com/PwAzEc2y1b

— Santiment (@santimentfeed) December 28, 2023

Glassnode data also showed that smaller entities have set accumulation records, breaking new highs throughout 2023.

— glassnode (@glassnode) November 28, 2022

As in previous cycles, this continued accumulation is an potential indicator that the flagship crypto, and by extension the broader crypto market, is yet to reach its peak.

The Bitcoin halving and historical data highlight BTC’s potential

Bitcoin’s price trends often paint cyclical patterns. Analysts have drawn parallels between the current price trajectory and historical patterns, suggesting a potential bullish cycle similar to that witnessed in 2013 and 2017.

Similarly, Bitcoin’s historical bull runs tend to follow four-year cycles, often spurred by events like the supply reward halving, which reduces the rate at which new BTC is created and earned by miners.

The next halving event will occur in the spring of 2024, and traditionally, bull runs can start months before the event and continue until the price of Bitcoin reaches a new all-time high.

#Bitcoin targets $100k in 2024!

⛓️ Halving anticipation grows.

ETF approval on the horizon.

The 4-year cycle remains robust.

Banks face challenges.

BTC evolves as digital gold.

$9 trillion Blackrock backs BTC. pic.twitter.com/Hy1eLmk13A

— B love network (@NaveenKarothiya) December 23, 2023

In fact, six-figure BTC price predictions are also becoming increasingly commonplace now that the halving is less than six months away.

While some analysts believe the upcoming halving will be the most important yet, others argue that it may play out differently this time around.

Related: Bitcoin bulls and bears prepare for end-of-year $10B BTC options expiry

Crypto market sentiment continues to rise

Lately, social media circles have witnessed a revival of positive sentiment. The Crypto Fear and Greed Index, a barometer of investor sentiment, stands at a notable score of 73, hinting at prevailing “greed” in the market.

Crypto Fear and Greed Index. Source: Alternative.me

Notably, this index has stayed above the 50 mark for the better part of 2023, which is an indication of the positive sentiment the market players have for the wider crypto market.

This pattern in market sentiment has been a precursor to price rallies in the past and could be an indicator of an upcoming bull run. Interestingly, the last time the market sentiment was at this level of greed was in November 2021, when Bitcoin reached its ATH high price of $69,000.

Technical indicators also reflect traders’ bullish sentiment

The total crypto market capitalization broke above the 50-week exponential moving average (EMA) at $1.1 trillion on Oct. 23. Buyers have possibly set their target on the April 2022 range high at $2.168 trillion— an expected average 33% gain across the market. Technical traders would look to tap these key levels before anticipating a reversal.

The relative strength indicator (RSI) for the global crypto market cap has moved into the overbought territory, edging close to the 80-point resistance, reinforcing the dominance the bulls have in the market. The EMAs had also produced a bullish cross on the weekly chart. This happened on Dec. 4 when the fast-moving 50-week EMA crossed above the 100-week EMA.

Total crypto market capitalization. Source: TradingView

Furthermore, if buyers build support above the $1.75 trillion mark with positive volumes, the three-month-long uptrend could extend into 2024.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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