Are We in the Early Stages of a Bitcoin Bull Market? Bitfinex analysts reveal

While the global crypto market has split, with some parts, such as XRP moving in an uptrend and another part, like Bitcoin moving in a downtrend, Bitfinex analysts have suggested that the current downtrend on Bitcoin may not only lasts much longer.

In accordance Bitfinex’s alpha report this week, Bitcoin has recorded bullish performances in the past week. This has indicated a possible upcoming round of another rally from the top crypto, or in the words of Bitfinex analysts, this could mean we could be in “the early stages of a Bitcoin bull market.”

Is Bitcoin Bull Market Approaching?

In Bitfinex’s alpha report it is the stock exchange’s analysts pointed out several noteworthy points Bitcoin (BTC) has achieved in the past week, which may lead to bullish moves from the asset sooner or later. According to analysts, Bitcoin is starting to see new market participants.

Over the past few weeks, the asset’s derivative trading volume has increased faster than spot trading volume, thus driving volatility. According to the report, Bitcoin’s 7-day moving average spot trading volume has only increased by approximately $24 billion.

This is far lower than the derivatives market, which has seen Bitcoin trading volume on futures across various exchanges close to $1 trillion. While the amount recorded in spot trading volume is the highest ever in Bitcoin’s history, it is nowhere near the asset’s derivatives trading volume. The analysts noted,

“The BTC Long-term Holder (LTH) Spent Output Profit Ratio (SOPR) is now returning to a level greater than one, on multiple timeframes, indicating that coins are moving at a profit. The behavior of long-term Bitcoin holders selling their coins during current market conditions are consistent with previous bear market trends, which is a positive signal for the market.”

In particular, the increase in Bitcoin’s spot trading volume can be attributed to the US banking crisis, which prompted many traditional bankers to seek Bitcoin as an alternative store of value.

BTC’s option volume exceeds $10 billion

Furthermore, Bitcoin’s options volume has not been left out of the equation, as it has also been peaking in recent weeks, according to Bitfinex analysts.

Over the past few weeks, Bitcoin options open interest has increased to around $12.14 billion. The report suggests that this means that institutional investors are actively participating in the Bitcoin market, indicating the early stages of a bull market.

According to the analysts, while the increase in volume can be quite exciting for investors, it creates more risk as it increases volatility. Additionally, over the past year, Bitcoin’s recent active supply has increased in contrast to the asset’s supply of long-term holders which has plunged. The analysts noted,

“The BTC Long-term Holder (LTH) Spent Output Profit Ratio (SOPR) is now returning to a level greater than one, on multiple timeframes, indicating that coins are moving at a profit. The behavior of long-term Bitcoin holders selling their coins during current market conditions are consistent with previous bear market trends, which is a positive signal for the market.”

Meanwhile, over the past 7 days, BTC been in the red. The asset has fallen from a high of $28,783 on March 22 to trade under $27,000. This plunge comes after central bank governor Jerome Powell announced the interest rate hike last week.

At the time of writing, Bitcoin is currently in a downtrend along with some parts of the crypto market. The asset is down nearly 1% in the last 24 hours with a trading price of $26,837. In contrast, the 24-hour trading volume is $16.5 billion, down 6.7% over the same period.

Featured image from Shutterstock, chart from TradingView