Following Monday’s market crash, concerns about the sustainability of Bitcoin’s bull run have emerged. Still, Ki Newborn Ju, founder and CEO of CryptoQuant, a leading blockchain analytics firm, remains positive. He suggests that despite the recent crash, on-chain data continues to support the view that Bitcoin’s bull run remains intact.
Bitcoin On-Chain Analysis: Bullish Arguments
#1 Bitcoin Hashrate
Bitcoin’s hashrate, which measures the computing power used to mine and process transactions, is approaching an all-time high (ATH). Ju notes, “The capitulation of miners is almost over, and the hashrate is approaching an ATH. Mining costs in the US are ~$43k per BTC, so the hashrate will likely be stable unless prices drop below that level.”
#2 Whale Behavior
Significant Bitcoin inflows into custodial wallets are another argument for the bullish bias, indicating robust accumulation by large-scale investors, often referred to as “whales.” Ju emphasizes: “Significant BTC inflows into custodial wallets. Regular holder addresses increased by 404k BTC, including 40k BTC in US spot ETFs over the past 30 days. New whales are accumulating.”
#3 Retail investor participation
The current confined participation by retail investors is similar to the patterns observed in mid-2020. Ju notes, “Retail investors are largely absent, similar to mid-2020.” This absence may contribute to lower volatility, as retail trading often leads to rapid price swings.
#4 Ancient Whales Still HODL
Between March and June, long-term holders (those who held for more than three years) transferred their Bitcoin holdings to modern investors. There is currently no significant selling pressure from these experienced holders.
Bearish Chain Data
#1 Macroeconomic Risk
On the other hand, Ju points to macroeconomic risks and recent market actions that could affect Bitcoin’s price stability: “Macroeconomic risks could lead to a forced sell-off. Jump Trading recently made large crypto deposits, and Binance hit a YTD high in daily deposits.”
#2 Chain boundary pointers
Although some on-chain indicators have recently turned bearish, they are borderline, according to Ju. He says, “Some on-chain indicators have turned bearish, but they are borderline. If bearish trends persist for more than two weeks, the market may be difficult to recover.”
#3 Bull Bear Cycle Indicator Signals Bearish Phase
Interestingly, the bull-bear market cycle indicator also signaled a bear market phase (high blue area on the chart) for the first time since January 2023, which warrants close observation. Julio Moreno, CryptoQuant’s Head of Research, added that the indicator has previously identified confined bear market phases during significant market events such as the COVID sell-off in March 2020 and the Chinese mining ban in May 2021. Furthermore, it also correctly predicted the beginning of the bear market in November 2021.
Despite these bearish undercurrents, Ju remains cautiously positive about Bitcoin’s potential to reach a modern all-time high by the end of the year. “As long as Bitcoin price stays above $45k, it could break through its all-time high again within the year, in my opinion. Some indicators are showing bearish signals. However, it could still bounce off the bottom, so we need to watch to see if it holds at this level for a week or two. If it holds longer, the risk of a bear market increases, and a bounce could be difficult if it lasts more than a month,” Ju concluded.
At the time of going to press, the BTC price was $56,639.
Featured image created with DALL.E, chart from TradingView.com
