FameEX Hot Topics | Grayscale Analysis Suggests Bitcoin Is in the Middle of a Bull Run, Foresees Continued Growth

Amid a notable resurgence in bitcoin's value, Grayscale, in collaboration with analyst Michael Zhao, has offered an insightful analysis into the current dynamics of the bitcoin market cycle. Their research seeks to ascertain if Bitcoin is currently experiencing a bull run by examining the primary factors influencing its market and their potential future impact.

Throughout the past decade, the crypto market, with bitcoin at the forefront, has displayed a cyclical nature characterized by alternating bull and bear periods. Grayscale's latest findings suggest that bitcoin is now in a bullish phase, propelled by a mix of technical and fundamental aspects. These include notable inflows into spot bitcoin ETFs and the increasing total value locked (TVL) in decentralized finance (DeFi) platforms, among other factors contributing to this positive trend.

The analysis positions us in the "mid-phase" of the current bull market, likened to the fifth inning in a baseball game, projecting continued growth ahead. Highlighting bitcoin's recent achievement of record price highs in several currencies, the study signals sustained market momentum with a possibility for further advancements. Zhao recommends that investors remain alert to key indicators, such as spot bitcoin ETF inflows and macroeconomic factors, to anticipate possible market movements.

The report further explores bitcoin's escalating dominance, indicating its crucial role as a precursor to the general crypto market's success. The significant role of spot bitcoin ETF inflows is identified as a major influence, creating upward pressure on prices and bolstering a bullish sentiment. Moreover, the analysis underscores strong onchain fundamentals, like the increase in stablecoin inflows and the growth of TVL in DeFi, as vital supports for the bull market's durability.

Zhao highlights a notable decrease in the quantity of bitcoin held on exchanges, a 7% drop since May 2023, hinting at a supply contraction partly caused by ETFs transferring bitcoin into custodial cold storage. According to Glassnode, the share of total bitcoin on exchanges has fallen to around 12% of the circulating supply, the lowest in five years.

Despite these encouraging signs, Grayscale and Zhao advocate for caution, pointing to ambivalent retail market sentiments and the uncertain effects of new spot bitcoin ETF investors during market corrections. Concluding on a cautiously optimistic note, their study suggests that bitcoin is currently positioned in the middle of a nine-inning cycle, specifically in its fifth inning, suggesting the potential for further expansion in this bullish phase.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.