Since the approval of the Bitcoin spot ETF, the Bitcoin price has soared, just a step away from the $100,000 mark. But in this bull market, only "Bitcoin alone" has risen, with Bitcoin's share of the total crypto market cap steadily increasing.
Will the altcoin season come again? Or has the $100,000 Bitcoin already reached the peak of the bull market? We compared the data of the past four years to answer this question.
Basic Situation Explanation
Data Source
The data involved in this article includes ① Bitcoin price, ② Bitcoin contract funding rate, ③ Bitcoin contract trading volume, ④ Bitcoin contract active buy volume, ⑤ total stablecoin market cap, ⑥ total crypto market cap, ⑦ Bitcoin market cap, ⑧ Nasdaq trading volume, etc.
Among them, the contract prices in ① are from Binance, and the spot prices are from CoinGecko; ②-④ data are from Binance contracts; ⑤, ⑥, ⑦ are from CoinGecko and defillama; ⑧ is from Yahoo Finance.
Chart Highlights
This article aims to qualitatively explore the market development stage rather than quantitative analysis, so in order to improve the readability of the charts, the charts involved in this article are drawn using Origin, and except for the "stablecoin market cap" data, all data has undergone smoothing operation (with Savitzky-Golay smoothing, window size 30, 2nd order fitting, higher smoothing degree, readers are advised to focus only on the trend changes, and individual data points that need special attention will be pointed out directly in the text).
Looking back, what data foreshadowed the arrival of the peak?
Funding Rate
Funding rate is undoubtedly one of the most understood and intuitive data. We first reviewed the first big bull market in January - May 2021, and the relationship between Bitcoin funding rate and Bitcoin price is shown in the following figure:
From this, we can get a very significant rule, that the peak price and the extreme funding rate coexist, and the funding rate extreme value often appears before the price peak. The three extreme values of the funding rate appeared in early January, mid-to-late February, and mid-April, corresponding to the prices of $40,000, $45,000, and $60,000 respectively.
But at the same time, it should be noted that high funding rate does not mean absolute top, but the rising funding rate is more obvious in the early stage of the bull market.
The Bitcoin funding rate and trend from the end of 2023 to April 2024 are shown in the following figure:
It can be seen that the market has become much "calmer" around 2024, and although Bitcoin has hit a new high, the funding rate has not broken through the 0.1% mark again (the maximum value occurred on March 5, with a price of 66839 USDT). But similarly, we see that the funding rate reaches its peak ahead of the price peak.
Active Buy Volume
Here we have selected the active buy volume of Bitcoin contracts on Binance as the research object, and also selected January - May 2021 as the research period. Similarly, it can be clearly seen that this indicator is a "reverse indicator" or a "lagging indicator".
The peak of active buy volume is often later than the price peak, and during the process of price decline, the active buy volume rises faster, indicating that users in 2021 preferred to buy the dips actively.
The data from the end of 2023 to April 2024 is shown below, and interestingly, this indicator has become a "leading indicator" again, with active buy volume appearing synchronously or slightly earlier than the price peak, and with greater volatility and more significant, which is expected to become an effective reference indicator.
Stablecoin Market Capitalization
In 2021, the US Federal Reserve's unlimited QE during the bull market led to an influx of hot money from outside the market, driving the frantic issuance of USDT by Tether, which accelerated the bull market. We first review the total market capitalization of USDT and the total cryptocurrency market capitalization from 2021 to 2023 as follows:
It can be seen that stablecoins are not correlated with the trend on a small scale, and it is necessary to expand the perspective to the annual line level to show a slight correlation.
Bitcoin Price and Altcoin Season
The following chart shows the Bitcoin price, Bitcoin market capitalization, total altcoin market capitalization, and market share over the past 4.5 years:
Specifically, in 2020 and 2021, when Bitcoin's first wave was triggered, the altcoin market share plummeted, and then quietly turned around in early 2021, with the higher Bitcoin's price rose, the higher the altcoin market share became.
Returning to the present, Bitcoin has already completed the first and second waves of its launch, but the decline in altcoin market share is not rapid, and there are no obvious signs of bottoming out and rebounding.
In terms of trends, it is difficult to be precise, but in terms of absolute values, the two key occupancy rates in the previous bull market were 30% at the bottom in early January 2021, and 40% in mid-February 2021. The current value is 46%, not far from the nearest launch point.
Market Activity
Last week, on-chain analyst @ai_9684 xtpa posted on the X platform:
"Since Binance launched the GOAT contract at the end of October, I have clearly felt that Binance's attitude towards Memecoins has begun to change. Over the past 30 trading days (2024.10.07 - 11.15), Binance's trading volume is 10% higher than Nasdaq and twice that of the New York Stock Exchange (NYSE), about 16 times that of Coinbase, accounting for about 50% of the global centralized exchange trading volume."
First, is it true, and then what - has the market trading volume reached a historical peak? After reviewing the data, we found that on November 12, the Bitcoin contract trading volume reached the fourth highest record in the past 4 years (the top three were on March 5, August 5, and February 28, 2024 respectively), and the fifth highest point was on May 19, 2021.
Does the peak trading volume mean that the market is at the top? The data for the past four years is shown in the following figure:
It can be seen that only three peaks exceeded $30 billion, and the first two appeared near the top.
What stage are we in?
In summary, funding rates, active buy trading volume, and total trading volume are leading indicators of the market. The total trading volume has issued a warning, so what stage are the other two indicators in?
The funding rate is shown below, and it can be seen that the current funding rate is still at a low point, far from the level of March this year, let alone the crazy stage of 2021.
The active buy trading volume is shown in the following figure, and this indicator also hit a new historical high on November 21.
