Why is this bull run different from previous ones? Six charts reveal the driving forces behind Bitcoin's pump.

Original Title: "These Six Charts Explain Why Bitcoin's Recent Move to Over $100K May Be More Durable Than January's Run"

Author: OMKAR GODBOLE

Compiled by: Ismay, BlockBeats

Editor’s Note: Bitcoin reached a new high on Pizza Day, as if fate gifted the crypto market a celebration. However, unlike previous bull markets, this new high for Bitcoin is a solo celebration for BTC, with only modest gains in the altcoin market. This article explains through six charts why Bitcoin's recent surge past $100,000 may be more sustainable than the rally in January. Key indicators such as the financial environment and inflows into stablecoins show that the foundation for this rally is more solid than the "double top" pattern from December last year to January this year.

The key information is as follows:

Bitcoin is currently trading above $100,000, and the market environment indicates that the basis for this rise is more solid than the "double top" trend from December last year to January this year.

The current financial environment, stablecoin inflows, and the performance of spot ETFs are all more favorable 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 the $100,000 mark. As investors tend to be susceptible to "near-term bias", 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 benchmark Treasury yields (e.g., US 10-year Treasury yields) and the U.S. 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 behavior. As of now, judging by the 10-year Treasury yield and the dollar index, the current financial conditions are significantly more accommodative than in January this year, which is conducive to the continued rise of bitcoin.

At the time of publication, the dollar index, which measures the greenback against a basket of major currencies, was trading at 99.60, down 9% from its January high of 109.00. The US 10-year Treasury yield stood at 4.52%, down 30 basis points from its January high of 4.8%.

Although the yield on 30-year U.S. Treasuries has risen above 5%, returning to January levels, the market generally sees this as a positive factor for Bitcoin and gold.

There is still "dry gunpowder" in the market.

The two major stablecoins pegged to the US dollar—USDT and USDC—have reached a record total market capitalization of 151 billion dollars. According to TradingView data, this figure is nearly 9% higher than the average market capitalization of 139 billion dollars from December last year to January this year.

In other words, there is now more "dry powder" in the market - that is, potential funds available for investing in Bitcoin and other crypto assets.

Strong directional bets

Since early April, when Bitcoin rebounded from a low of nearly $75,000, this round of increase has been primarily led by institutions, which are mainly betting on long positions rather than adopting arbitrage strategies.

This can be seen from two aspects: first, the continuous inflow of significant funds into the Bitcoin ETF listed in the United States, and second, the relatively moderate scale of open interest in Bitcoin futures at the Chicago Mercantile Exchange (CME).

According to data source Velo, CME Bitcoin futures notional open interest has climbed to $17 billion, the highest since Feb. 20. However, this figure is still significantly lower than the peak of $22.79 billion in December last year.

Conversely, according to Farside Investors, the cumulative inflows into the current 11 spot Bitcoin ETFs have reached a record $42.7 billion, up from $39.8 billion in January this year.

Signs of speculative frenzy are missing

Historically, Bitcoin's periodic or cyclical tops, including from December last year to January this year, have often been accompanied by a high degree of speculative sentiment in the market, which tends to drive up the market cap of "non-serious" tokens like DOGE and SHIB.

However, there are currently no similar signs, and the total market capitalization of DOGE and SHIB is still far below the highs of January.

No signs of overheating

Although Bitcoin is currently close to an all-time high, it is reasonable that there is indeed a certain demand for long leverage in the perpetual contract market. However, the overall position is still relatively light, showing no signs of over-leveraging or overheating of bulls, and the funding rate is well below the high in December last year.

The chart shows the funding rate, which is the cost of holding a perpetual contract. A positive value indicates that the bulls are willing to pay a premium for the position, i.e. the bulls pay the bears to maintain the position. This is often seen as an indicator of bullish sentiment in the market.

Implied volatility shows a stable market

In terms of implied volatility, the Bitcoin market appears to be calmer at the moment. Deribit's DVOL index, which reflects the expected volatility over the next 30 days, is significantly lower than it was from December last year to January this year, and when the price peak occurred in March 2024.

A lower implied volatility means that traders do not expect significant fluctuations or major uncertainties, which is often a sign of an overheated market. This also indicates that the current upward trend is more rational and may be more sustainable.