K33: BTC recovery is faster compared to past cycles

Will there be a Bitcoin rally in 2023: detailed market analysis
  • Bitcoin’s recovery towards its all-time high is proceeding faster than in previous years, driven by institutions.
  • Restrained demand from retail investors creates the preconditions for maintaining positive dynamics.
  • The approval of a Bitcoin ETF between January 5 and January 10 could trigger “news selling” in the absence of sufficient demand for the instrument.

Considering the reduction in the size of the rollback from ATH in November 2021 to 36%, we can talk about a much faster recovery to the maximum relative to previous cycles. This opinion was reached in K33 Research.

755 days have passed since the last ATH was reached. The correction decreased to -40% in 2021 on day 1092, and in 2017 – only 1178 days later.

Data: K33 Research.

Analysts attributed the difference to demand from financial institutions driven by expectations of approval of spot digital gold ETFs, they added.

“In none of the past cycles has institutional demand been comparable to the current one – large institutions are both participating in the space and publicly supporting Bitcoin. In 36 days, US ETFs will receive their final verdict.” – the report says.

QCP Capital Analysts warnedthat further dynamics will be determined by the actual demand for the instrument.

“Whether we get back to the $69,000 ATH or not depends on actual inflows into the ETF in the first few weeks of trading. If they are insufficient, a classic “selling on the news” may arise.” – they explained.

Previously SEC began collecting public feedback regarding spot Bitcoin ETFs. Lawyer Scott Johnson saw this as a signal of the regulator’s readiness to simultaneously approve all applications for the instrument before January 10, 2024.

Bloomberg analyst James Seyffarth shares this view. The specialist outlined the window for potential approval of the product from January 5 to 10.

According to K33 Research, the data CME The growth in annual premiums in Bitcoin and Ethereum futures above 17% and record open interest indicate a lack of profit-taking by institutions.

Data: K33 Research.

Experts drew attention to the lack of excitement among retail traders. Bitcoin’s 164% jump since the beginning of the year has not led to a significant increase in traffic and trading volume of cryptocurrency exchanges. Activity is now inferior to the values ​​of the third quarter of 2022, experts added.

Dynamics of visits to cryptocurrency resources. Data: K33 Research.

According to The Block, there is no positive trend in the dynamics of the number of search queries for keywords.

Data: The Block.

K33 Research’s observations suggest a lack of significant enthusiasm on offshore crypto derivatives platforms, where funding rates remain just above zero. Analysts noted that risk appetite has “certainly not reached alarming levels.”

“The fact that retail investor participation remains negligible suggests that Bitcoin still has significant room for further growth,” – the report says.

Let us remind you that Glassnode analysts noted the transition of the first cryptocurrency to the accelerating stage of the bull market.

In early December, Matrixport analysts confirmed the forecast for Bitcoin to grow to $63,000 by April 2024.

Previously, Blockstream CEO Adam Back predicted digital gold at $100,000 in the coming months.

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2023-12-07 08:13:36
#K33 #BTC #recovery #faster #compared #cycles

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