Don't be anxious, my friend, we're still in the early days of the bull market

Words: Jake Pahor

Compilation: Deep Tide TechFlow

Crypto researcher Jake Pahor expressed his opinion on the market. In this article, we’ll take a deep dive into the market cycle, BTC dominance, ETH/BTC ratios, stablecoin inflows, DeFi TVL, retail enthusiasm, and more, taking a deep dive into where we stand in the market cycle and where we go in the future.

Market Cycles

“History doesn’t repeat itself completely, but it tends to rhyme.”

Reviewing previous cycles can help to understand what will happen next. Although it is not guaranteed to be exactly the same, it can give us an idea of the rotation of capital.

We are currently in the first phase – BTC.

This is the early stage of a bull market, where all liquidity is drawn into the safest asset – the BTC. Among the more volatile asset classes, BTC have the lowest downside risk, coupled with possible ETF approvals and halving, with significant growth potential.

BTC Dominance

We can measure and visualize this capital rotation cycle by looking at the BTC dominant chart.

Since September 2022, BTC. D has been in a strong uptrend, forming a series of HH + HL (lows are no longer lower; and the highs are even higher), indicating a bullish trend.

The current market share of BTC is 55%, a multi-year high.

The level to watch next is around 58-60%, as this range has previously acted as a support and resistance zone.

Eventually, BTC. D will reach the peak of the cycle and begin to fall back. As risk appetite rises, capital will shift to ETH → large-cap stocks → altcoins.

ETH/BTC

Another important chart to look at is ETH/BTC.

ETH has been underperforming since December 2021. Manifested by a downtrend and a series of LL + LH (the highs are no longer higher, the lows are lower).

The second phase of the market cycle begins when ETH/BTC bottoms out and begins to pick up.

Stablecoin inflows

Since 2022, the stablecoin market cap has been on a strong downward trend. This is consistent with the capital exit space and is in line with the characteristics of a bear market.

However, we may be seeing signs of a bottom forming.

• October 2023 = $124 billion

• December 2023 = $129 billion (+5%)

Bull = stablecoin inflows.

DeFi TVL

TVL is often seen as a lagging indicator. However, it is still useful for researching and understanding overall trends.

TVL has been fluctuating in a range since 6/22. However, since October, we have seen a good uptrend.

• October 2023 = $36 billion

• December 2023 = $50 billion (+39%)

Interest of retail investors

Once your family and friends start asking if they should buy cryptocurrency, it’s usually a good sign of a peak.

Previously, after BTC reached $64,000, Google search peaked in May 2021. But at the moment, retail interest in cryptocurrencies is still very low.

Summary

It’s easy to get carried away by the recent rally in the market and think: Oops, I haven’t gotten in the car yet.

So, FOMO creeps inside you, and you feel like you’re one step behind the market.

Take a break, shift your attention, and look at the data.

We are only in the first phase of the BTC season.

It will be some time before the copycat season begins.

Now is the time to pay attention and redouble your efforts to conduct research, build systems and processes. Let’s work together, and in a few years, I have full confidence that the market will reward us with gains beyond our imagination.