- Bitcoin is trading above the $96,000 price level.
- The Bitcoin market dynamics are different compared to the 2020/2021 bull run.
Bitcoin is trading close to the $96,000 price range after dropping to $93,487 earlier today. Even though the lower price ranges are common before a bull run, the market dynamics of Bitcoin are different this time. The overall crypto market cap is hovering at around $3.17 trillion with a slight increase of 0.53%. Meanwhile crypto fear and greed index records 37, indicating a cautious environment among traders.
Popular market analyst Ali mentioned that Bitcoin long-term holders are in the denial phase on his X account. The BTC long term holder NUPL indicator chart showed that these investors are in a denial phase for the past two weeks. When BTC reached a new ATH crossing the $100,000 after Trump’s re-election, this indicator continued the greed phase till Jan 2025.
Ali says the denial phase of long-term holders often precede major market shifts. Historically, this was the case. With the already existing anticipation of a bull run, Ali’s post further fostered the belief that a bull run is around the corner. However, the BTC market dynamics are different this time compared to previous cycles, which could pose a challenge for investors.
The Absence of High Leverage Environment in Bitcoin Market
In the last bull run witnessed in 2020/2021, Bitcoin liquidations caused extreme volatility in its price. This environment often leads to high leverage in the market. Bitcoin and Ethereum recorded more than $600 million liquidations on some days recently. However, this is not causing extreme volatility and it is not offering much leverage at present.
This difference in market dynamics suggests that traders have become strategic enough to set up stop losses. The Matrixport report suggested that this could be because of the strong conviction caused by SEC’s Bitcoin ETF approvals. Unlike previous market scenarios ahead of bull run, the present BTC market offers low leverage for traders.
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