The bull market has begun subtle signals of market transformation and forward-looking analysis

The bull market signals market transformation and forward-looking analysis.

The prelude to the bull market seems to have begun, but the accuracy of the predictions still needs to be verified. By conducting in-depth research on market fundamentals and historical data, we can determine the true moment of the bull market’s arrival and how to prepare for this transition. The following content is compiled by MarsBit:

The prelude to the bull market has begun!

However, are these predictions accurate?

Curious, I dug deep into historical data, trying to determine the true moment of the bull market’s arrival.

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As a long-time bear market observer, I finally begin to feel the breath of the bull market.

Many people are enthusiastic about the current bull market, but it is more important to recognize a fact:

➜ The market’s transformation will be unexpected and subtle for many people.

✱ There is also a question: how to become one of the first to notice the arrival of the bull market?

To answer this question, I conducted in-depth research on market fundamentals rather than relying on technical analysis of $BTC or $ETH.

I suggest carefully considering every factor to fully understand the market’s condition.

◢ Trading Dynamics

It is well known that the market tends to be cyclical, and through rigorous analysis of the S&P 500, these data can be projected onto the cryptocurrency market.

What initially caught my interest was the general interest on-chain, specific numbers omitted.

Deep analysis of this data reveals similar patterns in trading volumes. The focus is not on the numbers themselves, but on the dynamics driving these numbers.

When we observe the market from 2016 to 2020 on the left and from 2020 to the present on the right, a contrasting picture emerges.

➡︎ Based on this data, we may experience another pain point, and it is expected to manifest in the coming autumn and winter seasons.

✔ Interestingly, the current market is going through an obvious trough, with no single narrative dominating. The presence of leaders and outsiders in various fields is palpable.

This may indicate a rapid decline in interest. In this situation, even the smallest negative news could have a significant impact on the market.

◢ Core Developments

Regardless of how the market is, key developments are still ongoing. This shows a high level of focus from builders and developers.

✔ But it is important to note that, despite the ongoing progress, the launch of new projects has become increasingly scarce. Therefore, this dynamic is starting to be compressed.

➡︎ Currently, many projects have delayed their launch dates, waiting for better market conditions. However, as these delays accumulate, projects will start to take risks and gradually push for launch. This will have a catalytic effect on other projects.

Essentially, this is like a house of cards, but in this case, it is a good thing.

▪ When a project sees the launch of other projects, it generates collective momentum, resulting in positive effects.

I have worked in the Web2 field, and we also acted in the same way based on market positioning.

◢ Total Trading Volume

Trading volume is approaching its lowest point again, despite having increased earlier this year.

➜ It is worth mentioning that the peak of this indicator occurred after the FTX crash. Faced with such a massive crash, people were almost afraid to enter the cryptocurrency field.

In order to achieve a market reversal, a similar “smoke bomb” is needed to prompt people to withdraw.

✔ This situation may be caused by negative news or simply a general lack of interest in cryptocurrencies. Now, it is noteworthy that despite being in a bear market, some indicators are showing great vitality.

These indicators often quickly inspire confidence in cryptocurrencies among most people, thereby increasing overall market interest.

➜ This phenomenon is known as the “explosive interest growth effect” or the “spring release effect”.

◢ Token Holders

➡︎ The number of token holders continues to grow.

➡︎ In the past 365 days, the amount of $ETH held has increased by 22%.

➡︎ This includes not only retail investors but also large funds, institutional investors, organizations, and key participants.

➡︎ This is not just a unique phenomenon for $ETH; significant accumulation can be seen for many major tokens.

Based on these statistics, we can confidently say that despite a decline in interest in cryptocurrencies, investor confidence remains strong.

I chose to emphasize $ETH because:

✔ It is a huge business area that generated $1.7 billion in revenue in the past year.

✔ Some Web2 companies have not reached this level of profitability yet, but confidence in them continues.

Please note: This analysis should not be applied to low market cap coins as their market conditions are completely different.

◢ Liquidity Lending

Liquidity lending protocols (LSDs) have demonstrated leadership regardless of market conditions. In the past 10 months, the size of this field has almost tripled, increasing from $7 billion to $20 billion.

✔ Now, LSDs have the largest market share in DeFi, surpassing all previous leaders, and it seems they have not stopped growing.

✔ The development of Layer3 (ReFi) continues and may further increase the total value locked (TVL) in this field.

✔ Overall, LSDs are one of the most important indicators in DeFi. Why? Because when building new protocols, many features beneficial to the liquidity lending field are typically considered.

Summary:

• LSDs effectively reflect the real interests of DeFi users.

➤ In my opinion, the market has already entered the pre-bull market phase, and this conclusion is based on the data we have observed.

The last important point we should discuss is:

➜ The ultimate pain point.

I believe that the biggest pain point of this bear market was reached at the bottom (when $BTC price was $15k per coin during the FTX crash). However, the final pain point is yet to be witnessed.

So, if we speculate on this:

❱ Pricing Bitcoin at $15k may not be wise, as there is a large crowd ready to buy this asset and drive it up to $100k.

❱ $12k is also not wise. The price difference between $12k and $15k seems negligible, and the buying behavior will increase.

❱ If the price drops to 7-8k, it will become very uncomfortable for significant participants:

✘ They will not be able to buy back a large amount of tokens at the lowest price because they need time.

✘ If the market stays at $BTC 8k for a long time, existing participants will sell at a loss, but new investors will enter.

That’s why this option won’t work.

◢ My view on the final pain point:

• For $BTC, it is $20k. In this range, there won’t be too many buyers as most people will assume that we are heading towards $15k again and try to capture buying opportunities there.

➤ The following data points should be considered next:

1. Increase in trading volume

2. Increase in active addresses

3. Increase in the total value locked (TVL) in protocols

These will be accompanied by:

➡︎ Inflow of funds into the market

➡︎ Increase in stablecoin market capitalization

I believe this is the sequence to follow. However, it is important to note that the market is cyclical, but the time intervals may vary. The bull market can start after the halving or at the end of 2024.

Therefore, I think now is the best time to accumulate assets that you trust.

Important note: My research is based on market cycles, historical data, and the current situation.

Note: This does not guarantee that the market will perform the same way.

Data source:

@tokenterminal

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