Why is this bull market different from the past? Six charts reveal the drivers of Bitcoin's rally
Original Title: These Six Charts Explain Why Bitcoin's Recent Move to Over $100K May Be More Durable Than January's Run
Original Author: OMKAR GODBOLE
Original compilation: Ismay, BlockBeats
Editor's note: Bitcoin's breakthrough to new highs on Pizza Day is like a celebratory gift from fate to the crypto market. But unlike previous bull markets, this new Bitcoin high is just a carnival for BTC alone, and the altcoin market has not risen much. This article explains why Bitcoin's recent break above $100,000 may be more sustained than January's rally. Key indicators such as financial conditions and stablecoin inflows show that the basis for this round of gains is more solid than the "double top" market from December last year to January this year.
The key messages are as follows:
Bitcoin is currently trading above $100,000, and the market environment suggests that the basis for this rally is more solid than the "double top" market from December last year to January this year;
The current financial environment, stablecoin inflows, and the performance of spot ETFs are all more favourable to Bitcoin than before;
Other key indicators also show no signs of overheating and speculative sentiment at the end of the year and the beginning of the year.
Bitcoin's current price is $106,546.31, regaining its foothold at the $100,000 mark. As investors tend to be susceptible to "near-term biases", many may assume that this move will be a repeat of the period from December last year to January of this year, when the upward momentum quickly waned and the price quickly fell back into the six-digit range, eventually falling back to $75,000 at one point.
However, looking at the next six charts, the current Bitcoin market appears to be more robust than it was in December-January, which means that the likelihood of further upside is also higher.
"Financial conditions" refer to a range of economic variables, including interest rates, inflation, credit availability and market liquidity, which are often influenced by macro indicators such as the yield on benchmark Treasury bonds (e.g. the US 10-year Treasury yield) and the US dollar exchange rate.
Tight financial conditions will dampen risk appetite in financial markets and the real economy, while accommodative conditions will encourage more risky investment behaviour. As of now, the current financial conditions are significantly looser than in January this year, judging by the 10-year US Treasury yield and the US dollar index, which is conducive to the continued rise of bitcoin.