The crypto market has accelerated dramatically in 2023. Bitcoin (BTC), the original cryptocurrency, has gained nearly 80% this year, with a 24% spike in March alone.
On the other hand, Ethereum (ETH) has made a profit of up to 76% year-to-date. Profits generated by the crypto industry far exceed traditional assets, as global financial affairs continue to stabilize.
According to a report by Bernstein the macro catalysts are pointing more towards Bitcoinamid weakening US regional banks and inflows of money into money market funds.
As Bernstein reports, the crash of FTX is the catalyst for a new bull cycle. The report mentions that the crash cleaned up the last batch of “malicious crypto leverage.” According to the report, the crypto exchange crash has shown investors the value of decentralized and self-managed wallets.
However, Bernstein added that the current cycle is not fully appreciated. However, the report indicates that this will be “the first crypto cycle involving top institutional investors.”
On-chain metrics point to a new bull cycle for bitcoin
A recent report by the analytics company Glassnode reinforces Bernstein’s data. Glassnode highlighted that there is an increased correlation between Bitcoin (BTC) and Gold during this trend cycle.
According to Glassnode, a total of 6.2 million BTC is available interest by 2023 (32.3% of supply). The development infers the importance of the base cost base under $30,000.
Despite the fact that the Bitcoin price has increased by more than 100% since its lowest point, there has been no discernible increase in spending on older BTC. Coins older than three months, often associated with bear cycle lows, however, represent less than 20% of assets held in Bitcoin.
As a result, despite the massive drop in 2022 and the market rally in 2023, holders of more than three months old coins (HODLers) control over 80% of the assets.
Although HODLers regularly connect with the currency inactive, the Bitcoin network is still quite active. On a monthly average basis, the number of organic transactions is now over 270,000/day, approaching a cycle high.
This has to do with both financial transfers and the appearance of the Inscription, which this week crossed the 1 million mark. According to Glassnode, on-chain indicators suggest that bear market conditions may have finally ended.
What should be expected in the future?
The above points highlight that the overall market is becoming more positive in 2023. However, it is important for market participants to exercise caution. The chance of an immediate bull market breakout looks great in theory, but it comes with tough times. Traders will get rekt if they are not careful with their positions.