31 May

Investors are closely observing Bitcoin's current market dynamics, noting striking similarities to the bullish period of 2015-2017. Drawing comparisons to historical patterns, optimism abounds regarding Bitcoin's future trajectory, reflecting its promising outlook reminiscent of its earlier bull market years.

Investors in Bitcoin Keep Adding Up

In March 2024, Bitcoin reached an all-time high of about $74,000 before seeing a 20% decline. Since the fall of the FTX in November 2024, this market correction has been the sharpest as of the closing date.

But since then, Bitcoin has nearly bounced back, reaching $72,000 on May 21. It is trading at about $69,000 as of this writing.

The on-chain analysis platform Glassnode stated, "From a comparative point of view, the drawdowns pattern across the 2023-24 uptrend appears to be remarkably similar to the 2015-17 bull market."

During the 2015-2017 period, Bitcoin's market lacked derivative instruments, with primary activity driven by fundamental spot transactions. The recent introduction and influx of funds into US spot Bitcoin exchange-traded funds (ETFs) have bolstered market foundations reminiscent of earlier times, emphasizing organic growth over speculative trading.

Comparing the current landscape to Bitcoin's early days highlights a shift back to basic dynamics, with a focus on spot transactions indicating potentially more sustainable growth. 

ETF inflows have surged recently, averaging $210 million per day in the past week, signaling a strong re-accumulation phase amidst the selling pressures from Bitcoin mining, which daily imposes around $32 million in sell pressure due to halving events.

While ETF inflows have slightly slowed in recent weeks, the overall trend remains positive, with a net inflow of $122.1 million reported so far this week according to Farside investors. 

This ongoing influx indicates robust demand from buyers supporting the Bitcoin market.

On-chain analysis from Santiment corroborates this trend, revealing a significant increase in Bitcoin holdings among wallets holding at least 10 BTC over the past five months. This accumulation pattern among larger wallet holders is a key indicator of bullish market sentiment, historically associated with upward price movements in cryptocurrencies.

Santiment noted, "Historically, one of crypto's top leading indicators is the collective holdings of wallets with at least 10 Bitcoin (exchanges or otherwise). When they accumulate, cryptocurrencies rise. When they dump, extended bear markets come."

May 2024, Cryptoniteuae

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