Data Reveals Market in Early Bull Market, Altcoin Season Yet to Arrive

Cryptocurrency

researcher Jake Pahor has shared his perspectives on the market. In this article, we will delve into various dimensions of the market, including market cycles, BTC dominance, ETH/BTC ratio, stablecoin inflows, DeFi TVL (Total Value Locked), and more. The goal is to explore our current position in the market cycle and potential future trends.

Market Cycles

“History doesn't repeat itself, but it often rhymes.”

Reviewing previous cycles helps to understand what might happen next. While it's not guaranteed to be identical, it provides insights into the rotation of capital.

We are currently in the first phase — Bitcoin.

This is the early stage of a bull market, where all liquidity is attracted to the safest asset – Bitcoin. Among the volatile asset classes, BTC has the lowest downside risk, coupled with the potential approval of ETFs and halving events, offering significant growth potential.

BTC Dominance

We can measure and visualize this capital rotation cycle by examining the BTC dominance chart. Since September 2022, BTC.D has been in a strong upward trend, forming a series of HH + HL (higher highs and higher lows), indicating a bullish trend. The current Bitcoin dominance level is 55%, reaching multi-year highs.

The level to watch for next is around 58-60%, as this range has previously acted as both support and resistance areas. Ultimately, BTC.D will reach the cycle peak and begin to decline. As risk appetite increases, capital will shift towards ETH → large-cap coins → altcoins.

ETH/BTC

Another crucial chart to watch is ETH/BTC. Since December 2021, ETH has been underperforming, showing a downtrend and a series of LL + LH (lower highs and lower lows). When ETH/BTC reaches a bottom and starts to rise, the second phase of the market cycle begins.

Stablecoin Inflows

Since 2022, the market capitalization of stablecoins has been in a strong downtrend, aligning with the characteristics of capital exiting the space, indicating a bear market. However, we might be seeing signs of a bottom forming.

• October 2023 = $1.24 trillion

• December 2023 = $1.29 trillion (+5%)

In a bull market, we typically observe an inflow of capital into stablecoins.

DeFi TVL

Total Value Locked (TVL) is typically considered a lagging indicator. However, it remains useful for studying and understanding overall trends.

• June 2022 to October 2023: TVL fluctuated within a certain range.

• Since October 2023: A notable upward trend has been observed.

• October 2023 = $360 billion

• December 2023 = $500 billion (+39%)