According to Grayscale, Bitcoin, the world's largest cryptocurrency, is currently experiencing a significant bull market.
According to a report published by the company, this bull cycle is driven by a combination of technical and fundamental factors such as spot Bitcoin ETF fund inflows, positive stablecoin flows, and Total Locked Value (TVL) growth in DeFi applications.
Grayscale analysts believe that we are currently in the middle of this bull run based on cyclical indicators. Analysts argue that in the current situation, there is still room for continued growth according to trends.
Over the past month, the Bitcoin price has soared, surpassing all-time highs in the US and quickly recovering from 2023 lows. Across more than 30 currency pairs, Bitcoin had reached all-time highs even earlier.
According to analysts, it can be difficult to precisely define a bull market. But a practical approach would be to consider bull markets as cycles of approximately three to four years, starting at the lowest price points of previous cycles. These cycles are typically characterized by a gradual upward trend in prices, peaking at the highest points of the cycle, followed by a period of stabilization or slight decline.
According to the Grayscale report, the current bull market differs from previous ones due to the rapid change in positive market dynamics, largely influenced by spot Bitcoin ETF inflows. Since ETF approvals in January, these inflows have consistently exceeded new Bitcoin production by more than threefold as of mid-March, putting upward pressure on the price.
There has also been a noticeable decline in Bitcoin held on exchanges since the local Bitcoin supply peak in May 2023, with a 7% decrease. This points to a supply squeeze caused in part by spot Bitcoin ETFs moving BTC into custodial cold wallets for long-term storage. The move away from exchanges, traditionally seen as a bullish indicator, signals a preference for holding rather than selling and investors' confidence in Bitcoin's value, analysts say.
*This is not investment advice.