This bull run is cyclical in nature, and these seven signals suggest it is just getting started.
Just three weeks ago, on Feb. 12, Bitcoin’s price crossed the $50,000 threshold. Fundstrat Global Advisors Head of Digital Strategy Sean Farrell said, “This rally in the near term certainly has some room to run.”
He was right!
The spot rally on cryptocurrency exchanges surged to just past $70,000 on Friday, Mar. 5, before retracing to where it is currently. So, after crossing $50,000, the rally sure had some room to run.
But here are eight signs it has room to run yet after re-gaining its highest price ever for the first time in just under two-and-a-half years.
1. The Fed Rate Hasn’t Even Dropped
The Bitcoin price is soaring to new all-time highs, and the federal funds rate for borrowing U.S. dollars has not even started to drop. The last time Bitcoin’s price soared this high, the dollar supply was at high tide, and the Fed held rates down low. This time, it did it without low rates.
James Butterfill, head of research at digital asset management firm CoinShares, recently told ABC News “the price surge has coincided with a period of stubbornly high interest rates, suggesting that the jump in demand owes little to excess cash in search of a place to land.”
When this changes, most likely in 2024, Bitcoin’s deflationary shelter from the Federal Reserve becomes a huge source of demand for the cryptocurrency while it enjoys the same boost of investment that tech stocks get from the glut of cash and the cheap borrowing of a low-interest rate regime.
2. BTC’s First Ever $20K Monthly Candle
Bitcoin printed its first-ever $20,000 monthly candle in February, a promising milestone and a hint of the possible abruptness of the price swings ahead.
As a result, one lead on-chain analyst at Glassnode wrote, “Unreal… Feb 2024 printed a $19.84k #Bitcoin candle, the largest monthly USD increase in history. This added $390B to the #Bitcoin market cap… Up a remarkable 47%.”
3. Weekend Bitcoin Trading Has Dropped
According to cryptocurrency data analytics firm Kaiko Research in late-February report, weekend crypto trading continues to drop as a percentage of weekly volume:
“However, this trend has been long-coming: the share of BTC traded on weekends has declined significantly over the past six years, dropping from 24% in 2018 to just 17% in 2023.”
That most likely indicates greater acceptance and use of cryptocurrencies by institutions that operate during business hours, Mondays through Fridays.
The trend has also continued in 2024:
“So far in 2024, just 13% of all BTC transactions between January 1 and February 20 were executed over the weekend. Breaking this down by region, weekend trading has declined on both offshore and U.S.-available exchanges.”
The drop from 17% to 13% shows the massive effect of spot Bitcoin exchange-traded funds (ETFs) on the market.
4. The Rally Overheated Coinbase (Sorry)
You know the Bitcoin price rally is going to be abrupt when the halving hasn’t happened yet, and volume melts Coinbase. The San Francisco-based cryptocurrency exchange went down at the end of February as crypto markets heated up.
The exchange experienced an outage after it was unable to handle the volume of requests. As a result, a technical glitch also told account holders they had zero balances on their accounts.
CEO Brian Armstrong posted,
“Apps are now recovering. We had modeled a ~10x surge in traffic and load tested it. This exceeded that number. It’s expensive to keep services over-provisioned, but we’ll need to keep working on auto-scaling solutions, and killing any remaining bottlenecks.”
The outage occurred soon after Bitcoin prices topped $60,000 at the exchange, the highest mark the crypto had notched since 2021. After news of the Coinbase outage began to spread on social media that Wednesday afternoon, Bitcoin lost around $2,800 of its value.
5. A Whale Pulled $1B Off Coinbase
Sorry, it’s not for sale. Not from this whale. Someone pulled $1 billion worth of Bitcoins off of Coinbase. Early on Mar. 1, a whale withdrew $1 billion worth of 16,000 BTC from Coinbase, according to Santiment.
That’s terrifically bullish for Bitcoin prices. Even as the cryptocurrency approached its previous all-time high number, this whale is not interested in selling. Furthermore, they are not alone.
In February, whales moved another more than one billion dollars worth of Bitcoin off Coinbase. They could sell for a profit now, but they seem to think the price has somewhere higher to run next.
Overall, Bitcoin on exchanges has been declining to a six-year low, a trend that shows no signs of stopping after the billion-dollar whopper of a withdrawal.
That shows high conviction, long time horizons, and massive global support for the Bitcoin price moving forward.
6. Bitcoin ETFs Now Own 4% of BTC
According to data from BitMEX, spot Bitcoin ETFs held 776,464 BTC as the month of March opened. That’s a whopping 4% of all the Bitcoin there is, and the Wall Street-regulated ETF market just took a bite that size out of the on-chain spot supply of literal Bitcoin in under two months.
It’s not exactly Arthur Hayes’ nightmare scenario in which the ETFs “could destroy” Bitcoin, but it is a serious bite out of it in under two months, enough to portend a violent supply and demand shock providing massive support to skyrocket prices higher.
Grayscale Investments research head Zach Pandl said,
“There is simply not enough bitcoin to accommodate all the new demand, and so natural supply/demand dynamics are driving prices higher.”
7. Congress Floats Letting Banks Custody BTC
ETFs are going to battle for Bitcoin with retail investors. Moreover, banks may soon join the competition for Bitcoin and drive scarcity and prices to new levels.
In the House Financial Services Committee, Rep. Mike Flood (R-NE) recently advanced a resolution that “will ensure consumers are protected by removing roadblocks that prevent highly regulated banks from acting as custodians of digital assets.”
First, ETF issuers and now regulated major banks will soon be able to custody Bitcoin, contributing to the global scarcity of the 21 million BTC ever issued. And the supply and demand shock continues.
