After eight (long) months of consolidation, Bitcoin makes a notable return to the forefront.
Stimulated by a major event: the victory of Donald Trump in the American presidential elections, the BTC hits new all-time highs (ATH) day after day!
This political turnaround acted as a powerful catalyst, restoring confidence to investors and injecting new momentum into the market.
But what do these changes really mean, and what implications can they have for the future evolution of Bitcoin?
The return of a positive dynamic
During the period from June to October, the market was dominated by loss-taking dynamics on the part of active investors. This trend reflected a certain caution and hesitation to fully engage in the market. Which pushed some to jump ship.
However, we are witnessing a turnaround with the return of a certain enthusiasm around recent events.
Investors are returning to the happy path of making gains, a sign of renewed optimism!
It is interesting to note that the last phase similar lasted seven months. Either between September 2023 and last April, before gradually fading. Perhaps this will happen again for this new phase of the cycle to see it last.
Bitcoin: Towards new heights
The question that now arises is whether These gains by investors could slow down the progression of the price of Bitcoin.
The available data suggests that although profits are being made, they are still too few to prevent the price from continuing to rise.
Supply and demand remain key factors. And if demand continues to increase while supply is limited, the price has every chance of continuing to rise.
Compared to previous all-time highs, the volume of profits made remains low. Especially after eight months of consolidation, investors seem to expect more.
Notably, we observehuge capital inflows into Bitcoin and the market from institutions ! Dhave the ETFs in the leadwhich helps a lot in the hope of seeing even more growth!
Reassuring behavior
The current behavior of investors is reminiscent of that observed in December 2020. Measured gains did not prevent Bitcoin from achieving a performance of 55% before reaching a local peak the following March.
Looking into the details, we see that both long-term holders (LTH) and short-term holders (STH) are making gains of around 7,800 BTC each! Still far from the 24,000 and 31,000 BTC observed last March.
Interestingly, despite a new ATH at $77,000, some STHs are still seeing daily losses of around 1,000 BTC. This can be explained by buying at high prices followed by rapid selling in response to market volatility.
However, this phenomenon is not significant enough to reverse the current upward trend.
The Miners join the dance
Miners also benefit from this positive dynamic.
Le Puell Multiple has increased by 30% since the beginning of September. It is an indicator that measures the income of miners in relation to their annual average.
This increase reflects an increase in miners’ income. It is also supported by growth in transaction fees which have doubled since last August.
It indicates that blockchain is increasingly used, which strengthens the security of the network and its long-term viability. Miners, being essential players in this market, see their efforts rewarded! Which can contribute to the overall stability of the system.
Also, this resumption of activity bodes well for supporting a continued rise in the price of Bitcoin!
The return of profitability for investors and miners is a strong signal of recovery.
However, even if the bullish train is in motion, it would be unrealistic to expect an increase without a hitch. Corrections and consolidation phases will probably punctuate this new phase, but optimism remains palpable.
Bitcoin appears poised to continue its rise, and it is still important to remain vigilant. On-chain signals show a healthy market, but it is crucial to closely monitor the evolution of demand and profit taking. If investors continue to manage their sales moderately, this dynamic could well continue, allowing BTC to aim for new highs.
The end of 2024 looks promising for Bitcoin, and it will be exciting to follow the evolution of demand and investor behaviors to navigate this booming comeback market.
Let’s remain attentive to market developments and key indicators. Bitcoin seems ready to write a new chapter in its history ! And those who know how to seize the opportunities could reap significant benefits!
