Where are we on the bull market chart?

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Running with the bulls

Bitcoin is now over 640 days into a bull market — if you believe we’re still in one.

Lengths differ across various models. But based on my own calculations, the past three bitcoin bull markets have lasted between 1,047 days (2015 to 2018) and 1,278 days (2018 to 2022).

So, if bitcoin were indeed destined to map to those four-year cycles (no guarantees there), then we’re over half way through our current period. 

(I’m counting November 9, 2022 as the start, when bitcoin bottomed out below $15,670 after FTX shut withdrawals.)

A couple hundred days ago — back in January — bitcoin’s bull market performance to date had more-or-less tracked between the previous two cycles: just under 4.5x returns.

Bitcoin at this point in the 2015 to 2018 cycle was however quickly heating up. Between January and July 2017, bitcoin exploded from $800 to over $2,800.

It eventually carried onto nearly $20,000 by the end of the 2017, setting an all-time high that wouldn’t be broken for three years.

Bitcoin today is more closely tracking the most recent cycle, between 2018 and 2022, as shown by the brown line on the chart above. It’s posted 278% market-to-date returns compared to 244%.

If the bull market were already over, it would’ve been the shortest in bitcoin history — not counting the initial price discovery in the two years after the genesis block.

But if the bull market is still ongoing, and bitcoin price action is indeed still cyclical, then we’ll have to go higher from here to map to those patterns, which does align with some analyst outlooks.

Based on the length of the previous three markets, bitcoin would still be bullish even until half way through next year. (NFA, past performance does not indicate future results, blah blah.)

Not all cryptocurrencies have been as bullish as bitcoin. Ether, for one, hasn’t been this far from flipping bitcoin in almost three and a half years.

On the chart above, the orange and pink shaded areas in the background show bitcoin and ether’s market cap, respectively. The areas are stacked, so a flippening would be when the smaller one takes up more than half of the combined space.

The blue line tracks the progress — and it’s been steadily retreating since peak 2021 bull market.

Solana has meanwhile never been closer to flipping ether. 

This time last year, solana’s market cap was only 4% that of ether’s — or $9.3 billion to $217.2 billion. Now, it’s at 22%, valued at $66 billion to $307.6 billion.

For what it’s worth, popular trader Peter Brandt recently predicted that SOL would gain 100% against ETH over the coming months.

The distance between solana and ether grew rather dramatically throughout the previous bear market, even if SOL was dragged down further by its association with Sam Bankman-Fried. 

Still, for Brandt’s call to come true, we’d probably need at least another half year of the bull. 

Works for me.

— David Canellis

Data Center

• BTC is working hard to hold $60,000 after spending the weekend range-bound. ETH is otherwise attempting $2,700.
• SUI has broken out, gaining 18% in 24 hours to $1.05 and more than doubling in the past week. It’s still about half below its March record of $2.17.
• MakerDAO has brought in more fees than the entire Bitcoin network in the past 30 days: $21.1 million to $19.7 million. So have Aave, Jito, Solana, Uniswap, Lido, Ethereum and Tron.
• Global stablecoin supplies are above $166 billion — the most since Terra depegged in May 2022.
• Latest Polymarket election odds: Kamala Harris: 52%; Donald Trump: 46%. There’s $575 million on the line.

The comeback queen

“Cryptocurrency looks to be making yet another comeback.”

That’s a direct quote from an investment funds outlook from Barnes and Thornburg. 

84% of those surveyed believe that there’ll be a jump in private investment activity in the sector over the next year. 

“59% of respondents also expect the total number of crypto-dedicated funds will increase over the next 12 months. That is a shift from last year, when most respondents said the then-current state of the cryptocurrency market had significantly affected their organization in a negative way,” the report noted. 

Barnes and Thornburg surveyed nearly 140 venture capitalists, private equity, hedge funds, and investors — including US-based limited partners and sponsors. Perhaps unsurprisingly, AI is another hot industry for these folks (though recent market action shows that the AI trade may be burning out for some investors). 

Two major factors contributed to the attitude change: the ongoing institutional adoption (duh) and the rebound in crypto prices. 

“A year and a half away from the FTX collapse, we’ve seen significant recoveries in bitcoin and other cryptocurrencies, ” Scott Beal, partner at Barnes & Thornburg, said. 

“The SEC’s approval of bitcoin ETFs is a big deal for the industry and may also increase the willingness of allocators to make investments in private crypto funds and other nonregulated products.”

Speaking of the bitcoin and ether ETFs, the latter has managed to carry the weight of positive momentum on its back as bitcoin ETFs continue to see some outflows.

“​​Considering the challenging environment for spot ETFs, as evidenced by recent BTC spot ETF flows, and factoring in the expected outflows from the Grayscale Ethereum Trust once it is converted into an ETF, the outlook for ETH spot ETFs appears positive,” Fineqia research analyst Matteo Greco wrote.

The 12-month horizon cited by the Barnes and Thornburg report plays right into another potentially bullish timeframe for crypto, depending on the outcome of the US presidential election. 

There are also reports that the campaign for current Vice President Kamala Harris is attempting to engage with crypto industry leaders, which could influence matters.

However, the Republican campaign for former President Donald Trump has been more vocal in its support of crypto. FalconX’s David Lawant recently reasoned that the US election could help break crypto out of its current trend.

Because, despite a potential runway for a positive catalyst, we’re still locked in an awkward moment for price action.

Fineqia’s Greco wrote: “Since the end of July, total open interest in Bitcoin has dropped by about 12%, from $4.6 billion to $4.1 billion. This decline highlights the substantial liquidations that have impacted the digital assets market, causing a snowball effect that drove prices lower and reflected a strong correlation between market activity on centralized and decentralized exchanges and the recent price action.”

“A reduction in leverage, while leading to short-term price declines, is often viewed positively by markets as it reduces the risk of over-leveraging, which could result in a more severe market correction if growing more and reaching nonsustainable levels.”

There’s a lot of potentials on the horizon, which isn’t necessarily helpful in the here and now. 

But it’s also August, and we’re still firmly in vacation mode. You know what we say: Just keep swimming.

— Katherine Ross

The Works

• Tether said the Celsius suit filed late Friday is a “shakedown” and they are prepared to fight the claims made by the now-bankrupt lender.
• More firms, including Dragonfly and Crypto.com, criticized the CFTC’s proposed prediction markets rules. 
• L1 Canto was offline over the weekend after a “consensus issue.” The team said it would be deploying an upgrade on Monday.
• BitGo announced a new joint venture for WBTC with BiT Global, and a “strategic partnership” with Justin Sun
• Marathon, taking a page from MicroStrategy’s book, announced a proposed private offering of $250M in convertible notes to buy more bitcoin.

The Riff

Q: What has summer done to the noise-to-signal ratio?

At times, it’s muffled it. At others, it’s made it so freaking loud. But that’s the name of the game when overall liquidity levels go down and folks aren’t manning their desks. 

It certainly makes intense selloffs a bit more dramatic and a little more scary, but the rebounds this summer have remained strong. 

Sometimes it’d be nice if the noise just simmered down to a dull hum, but this is crypto and we’re on 24/7 so we always have to be prepared for the funkiest of situations.

Just don’t get too used to it. August is traditionally a slower month but I have a feeling September’s going to jumpstart a lot of action.

— Katherine Ross

This is the second summer of the bull market and some curbed enthusiasm is to be expected.

When the market is truly hot, positive snippets like testnet launches, partnerships and usage milestones can make a difference in prices day to day.

All that stuff barely raises an eyebrow in our current moment. But there’s still some underlying expectation that any news is good news. 

News is just news right now. Even negative news. The market is going through the motions — and that’s probably the most bullish thing about crypto right now. 

For crypto to be where it’s at, with all the uncertainty on the macro, regulatory and political fronts, how bad can things really be?

— David Canellis

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