Bitcoin price targets hit 10-month highs with Bitcoin bulls encouraged by First Republic losses. This raises an important question: Are the bears leaving?
Is the Bitcoin bear market over?
Before a new bull market, crypto analyst RJ Fulton digs a little deeper. The troubles of 2022 that plagued Bitcoin (BTC) seem to have been forgotten as the leading cryptocurrency has risen more than 65% since the start of the new year. Thanks to this rise, optimists are hopeful that this renewed momentum may be enough to officially put an end to the bear market where Bitcoin has lost nearly 70% of its value.
To truly assess whether Bitcoin has put its latest crypto winter in the rearview mirror, investors need to look at some metrics other than just its price to accurately gauge the likelihood of a bull market on the horizon. The purpose of BTC as an investment remains unclear, possibly due to the various roles it can play. However, at its core it is a decentralized payment network. Therefore, by measuring activity on the network in the form of user addresses and transactions, it is possible for investors to get an idea of the health of Bitcoin today compared to other bear and bull market cycles.
What does the network say?
Let’s start with addresses. Rather than the ever-increasing total number of addresses, the rate at which new addresses join the network is more revealing. After hitting its lowest levels since the beginning of 2020, there has been a resurgence in the number of new addresses transacting on the network. According to Glassnode, a crypto research and data firm, more than 13.5 million new addresses joined on average per month on Blockchain last quarter. These levels were last seen in the first quarter of 2021, when Bitcoin took a bullish turn that resulted in just under $63,000. In fact, this March saw its biggest address increase since April 2021, with 14.4 million new users.
With almost a record amount of new addresses using the network, it’s reasonable to assume that transactions are also at the high end of the cycle. In the first quarter of this year, Bitcoin processed an average of 9 million transactions per month as demand for cryptocurrencies increased. Similar to the new address growth rate, to find trades at these levels you would need to go back to Q1 of 2021, when BTC was comfortably in the middle of a bull market.
not quite yet
With address growth and an increase in transactions, the Bitcoin price has risen significantly since the beginning of 2023. As you follow on Kriptokoin.com, Bitcoin has increased by 72% from January to March. Following the recurring theme of address growth and transaction count, this was its best quarterly performance since Q1 2021, where it increased 103%. Considering the combination of all these metrics, it might suffice to say that Bitcoin’s bear market gloom is over. However, the optimism that a bull market like in 2021 will return this year is false.
Rather, it seems that Bitcoin is currently on the fringes of its past bear market and its potential next leg in an upcoming bull market. But while it remains in this region, BTC still looks like a bargain. Buying the cryptocurrency today could be lucrative should a bull market return, given that it’s more than 50% below its all-time high and yet key metrics are close to levels last seen when the price of BTC was more than $60,000.
Hayes: “Uncertainty” is driving Bitcoin price
Bitcoin continued to respond positively to the next fast-developing episode of the US banking crisis. This was shaped around First-Republic-Bank, which this week announced a $100 billion reduction in deposits. Arthur Hayes, the former CEO of crypto derivatives exchange BitMEX, smelled blood. He argued that if the government refused to save the First Republic, it could set off a dangerous chain reaction of bankruptcy. In this context, Hayes said:
But if the FRC fails and the depositors get L, all other banks with the same problems will go bankrupt soon. The entire US banking system suffers from the same problems.
Hayes concluded that both Bitcoin and gold mainly benefited from the lack of clarity and consequent composure about the fate of the bank and the next steps of lawmakers. In line with this, “This uncertainty is what drives foreign currencies like gold and BTC,” he said.
First Republic Bank (FRC) 1-day candlestick chart / Source TradingViewBitcoin price going to $40,000?
Therefore, BTC traders and analysts are confident that the overall uptrend will continue regardless of temporary consolidation moves around $30,000. “The key breaking point is $27,800, not $28,800,” said popular analyst Michaël van de Poppe. “We’re ready for $40,000,” he said after that.
DaanCryptoTrades has made comparisons between the current recovery and the decline to previous monthly lows. In this context, “Sweeping the highs in quick succession. “Similar price action as we saw on the downtrend where we had about a dozen of these before the price went down properly,” he summed up.
Others, including popular trader Jelle and ByzantineGeneral, predict BTC price action to return to $30,000. Trader said, “OI has been properly deleted here. Nearly $500 million was wiped out,” he says, noting the derivatives market’s reaction to recent gains. He also said, “It probably means this mini-rally is almost over. Consolidation is next,” he says.
BTC perpetual futures data / Source Byzantine General/Twitter
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