A few months ago, optimism around Bitcoin was at its peak, with many expecting new all-time highs.
However, that enthusiasm has since shifted, leaving investors wondering whether this is merely a quiet phase or the start of a prolonged bear market.
🧵A few months ago, optimism was soaring, with many expecting #Bitcoin to hit new highs. But the narrative has shifted.
With tough macro conditions and slowing crypto adoption, many are left wondering: is this just a quiet phase or the start of a prolonged bear market?👇 pic.twitter.com/iuzxaF0nbi
— IntoTheBlock (@intotheblock) September 10, 2024
Market Overview:
Bitcoin’s price has remained under pressure, lacking significant upward momentum. Both retail and institutional interest appear to be dwindling, raising concerns about the market’s future. Once filled with hope for a rally, sentiment has now shifted to uncertainty.
In the last two months, around 236,155 $BTC have been withdrawn from #crypto exchanges, worth roughly $14.22 billion! pic.twitter.com/brJowGRb9C
— Ali (@ali_charts) September 10, 2024
Macro Landscape:
The looming threat of a potential recession is weighing on global markets, and while rate cuts are expected, their positive impact on risk assets, like Bitcoin, may take time to materialize. Until then, the macro environment will likely continue to dampen market sentiment.
The estimated leverage ratio across all #crypto exchanges has hit its highest level in 2024, indicating that #Bitcoin traders are taking high risk. pic.twitter.com/nV9MZ6Llvv
— Ali (@ali_charts) September 10, 2024
Declining Interest:
New user engagement with crypto has slowed significantly. Search trends for cryptocurrency have declined, and app rankings, like Coinbase, reflect this cooling trend. While some argue Coinbase’s dominance has waned, the broader decline in crypto interest is clear. Fewer people are engaging with the market, further adding to the growing concerns.
On-Chain Data:
On-chain metrics mirror this downturn. New Bitcoin addresses remain low, indicating a lack of fresh participants. This reflects the fading excitement from earlier this year.
On September 9, the Bitcoin spot ETF had a total net inflow of $28.7196m. Grayscale ETF GBTC had an outflow of $22.76m, and Fidelity ETF FBTC had an inflow of $28.5954m. Ethereum spot ETF had a total net outflow of $5.198m, and continued to have a net outflow for 5 days.…
— Wu Blockchain (@WuBlockchain) September 10, 2024
Cycles in Perspective:
Is this a bear market or a temporary slump? Historical Bitcoin halving cycles suggest it could be a post-halving dip, similar to what occurred in 2019. Back then, the market consolidated before turning bullish again—could we be following the same path?
However, long-term holder behavior paints a different picture, with balances hitting new lows, signaling a potential prolonged cooldown.
Leverage and ETFs:
Short-term holders recently sold off nearly 14,816 BTC (worth $850 million), and exchange withdrawals are climbing. Meanwhile, Bitcoin’s leverage ratio across exchanges is at its highest level in 2024, suggesting high-risk trades are prevalent. In ETF flows, Bitcoin spot ETFs saw net inflows, while Grayscale’s GBTC experienced outflows, pointing to mixed signals in the market.
Short-term #Bitcoin holders seized the recent price jump to offload approximately 14,816 $BTC, valued at nearly $850 million! pic.twitter.com/hiy37Gxz6X
— Ali (@ali_charts) September 10, 2024
Whether this is a temporary pause or the start of a bear market remains to be seen, but current data and historical trends suggest both possibilities are on the table.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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