8 key indicators tell you: Where is this cycle going? What will happen after $100,000?

With Bitcoin up 45% in the last month, I’ve seen a lot of talk about whether this is a “local top” or a “full run” all the way to the end of the year. These are mostly the instinctive calls of “key opinion leaders” and other market prognosticators and analysts on social media. Of course, no one has a crystal ball. But in order to build strong conviction, we like to combine our intuition, experience, and analysis with hard data. This helps us assign probabilities to possible outcomes as accurately as possible.

This is the hallmark of The DeFi Report. Our research typically includes:

Macroeconomic Analysis

On-chain data analysis

Market sentiment analysis

Fundamental analysis of blockchains and protocols

Analysis of cryptocurrencies’ native/idiosyncratic characteristics (e.g., politics, geopolitics, regulation, community, and other unique aspects of cryptocurrencies as global assets)

In this report, we will focus on Bitcoin on-chain data, and attach additional SPX6900 related content at the end of the article.

Our goal is to determine where we are in this cycle. To do this, we analyze Bitcoin’s current key metrics and compare them to past cycles.

1. Long-term and short-term holders

(1) Long-term holders

Let’s first look at Bitcoin’s “Smart Money”.

What is Smart Money doing now? Selling.

Long-term holders took profits in the first quarter of the year, re-accumulated wealth in the summer, and started to profit again after the US election. This is not surprising. After all, Bitcoin is up 45% last month. It is up 600% from the cycle low.

Currently, 69% of the circulating supply of Bitcoin is in the hands of long-term holders. As the bull run continues, we expect to see long-term holders transfer their coins to short-term holders. So the 69% percentage should continue to decline.

Data summary:

In the 2021 cycle, Bitcoin price peaked when 58% of the circulating supply was held by long-term holders.

In the 2017 cycle, the Bitcoin price peaked when 51% of the circulating supply was held by long-term holders.

Conclusion: Smart money is starting to profit. We think this will continue as new money enters the market. For prices to rise, demand (new money) must exceed supply. We think this will happen.

(2) Short-term holders

Turning to Bitcoin’s “New Money”

Short-term holders are new entrants into the market. In a bull market, we typically see this group trend upwards, while the number of long-term holders declines. This is exactly what we are seeing today.

Short-term investors chased the market again in the first quarter. Many short-term players exited in the big shakeout this summer. Now we are seeing a new surge.

Data summary:

Currently, 16.6% of Bitcoin’s supply is in the hands of short-term holders.

During the 2021 cycle, BTC peaked with short-term holders holding 25% of the circulating supply.

BTC reached its price peak in 2017 when short-term holders controlled 70% of the supply.

Conclusion: New money is flowing into Bitcoin. Judging from past cycles, there may be more new money flowing in in the future.

2. Exchanges

(1) Exchange balance

Currently, balances on exchanges are falling. This is somewhat of an anomaly because as prices rise, we should see coins moving into exchanges. Instead, we are seeing Bitcoin leaving exchanges, presumably in self-custody.

It’s worth noting that this isn’t the first time we’ve seen this happen. At the beginning of the price rally in early 2021, the yellow and black lines diverged in a similar pattern. Later in the cycle, funds ended up returning to the exchanges.

In addition to the fact that Bitcoin balances on exchanges are at their lowest level since 2019, I’ve also heard that OTC desks are short on Bitcoin. Here’s what Marcus Theilen, founder of 10x Research, said in a comment on one of my recent LinkedIn posts:

Conclusion: Bullish

(2) Financing rate

Funding rates in futures markets can help us understand trader sentiment and momentum. A green line means that longs are paying shorts to keep their positions open. A red line means shorts are paying longs.

Data summary:

Currently, the funding rate of Bitcoin is 0.012%. When the price of Bitcoin reached $100,000, the funding rate was as high as 0.025%.

In March this year, the financing rate was as high as 0.07%.

During the 2021 cycle, the funding rate peaked at 0.17%.

Conclusion: Funding rates today are historically quite low - considering Bitcoin is trading near $100,000. High funding rates indicate excessive leverage and a "house of cards" market structure. This is not what we are seeing today. So, bullish.

3. Market Value to Realized Value Ratio (MVRV)

The MVRV Z-Score helps us understand the relationship between Bitcoin’s current market value and “realized value,” which is the network cost basis tool. It basically gives us an idea of ​​the average unrealized gain for Bitcoin holders. It has consistently done an excellent job of identifying cycle peaks.

Data summary:

The current MVRV is 3.17. This means that the average holder has an unrealized gain of 217%.

The MVRV at the cycle peak in 2021 was 7.5 (a return of 650%).

At Bitcoin’s peak in 2017, its MVRV was 11 (a return of 1000%).

Let’s go a little deeper and focus on the long-term holder group:

The current long-term holding MVRV is 3.89.

The MVRV for March was 3.76.

The long-term holding MVRV was as high as 12 when the BTC price peaked in the last cycle.

The index was at 35 at its cycle peak in 2017.

The MVRV for short-term holders is currently 1.26, which indicates that the average return for short-term holders is 26%.

Data summary:

The MVRV in March was 1.45.

It peaked at 1.8 in the 2021 cycle.

The MVRV in the 2017 cycle was 2.4.

Conclusion: Both long-term and short-term holdings are likely to move higher MVRV before the end of this cycle.

4. Pi-Cycle Top Indicator

Similar to the MVRV score, the Pi-Cycle Top Indicator has historically been a good tool for identifying cycle peaks. It measures momentum by measuring the 111-day moving average (green) and 2 times the 350-day moving average.

When the market gets overheated, the shorter 111-day moving average crosses above the longer 350-day moving average.

Conclusion: The shorter moving averages are yet to go parabolic, which suggests that sharp rises and falls could occur at any time.

5. Market sentiment

We entered the "extreme greed" period on November 1st and have remained there ever since. Of course, you have to be fearful when others are greedy.

But there are some nuances to explore here. For example, we first entered the "Extreme Greed" period in early November 2020. We stayed there until that cycle peaked in April (a cycle that lasted for 5 months (with a few short pullbacks in between) that put us in "Greed").

Other off-chain indicators also suggest that the "extreme greed" phase of this cycle has begun. For example, the number of views of popular crypto YouTube channels is still about half of what it was at the peak of the previous cycle. Coinbase App ranks 15th (ranked first in the previous cycle).

Finally, I see more people calling for a "local top" than a true "super cycle." This is not what we typically see at tops. The more likely scenario for a true top is one that few will call because the extreme exuberance will be there - and many market participants think the "new normal" will last.

Conclusion: While there are some signs of prosperity (such as pump.fun, Microstrategy, meme coins, AI agents, NFT returns, etc.), more extreme greed is likely to come. It is human nature to expect volatility.

6. Attached SPX6900 data

Let’s look at SPX6900 – a meme coin we have mentioned in previous reports (and hold a small amount of) before. I strongly feel that the meme coin movements we have seen so far in this cycle are a prelude to what may happen in the future.

Why?

It's clear that retail investors prefer memecoins. People like to gamble. There seems to be something "gambling" about trading memecoins. Anyway, this is how I see memecoins. A gambling game. That's the utility of memecoins. It brings a sense of community and endless dopamine secretion.

There is no doubt that meme coins are attracting new users. I think they are a positive for the crypto world, but I also admit that they are not for everyone. Many meme coins are scams. Many people will lose a lot of money playing this game.

Now, frankly, as someone who has spent thousands of hours researching the crypto markets, my instincts about this industry are basically just a "gut feeling." But I wanted to share a sample of my SPX tracking so you can get an idea of ​​some analytical research.

When it comes to meme coins, I mainly look at the following:

Large number of promoters and social media buzz (mindshare/attention)

A growing community of token holders

Projects that have already seen major moves, such as sales or mergers.

Market value over US$100 million

Sufficient trading liquidity

Listed on an exchange (or may be listed in the future)

A large number of whales (indicating high confidence)

A clear slogan

A community making extremely high price predictions

Trading on Solana (easily accessible via Coinbase, Phantom)

Global Market/

Addressing interests

The SPX6900 seems to meet the above criteria. Here are some key points:

Note: Its social media accounts have grown from 9,000 followers to over 50,000 in the last few months. Its largest promotional account (Murad) has grown from 110,000 followers to 550,000 in the same period - spawning several smaller promotional accounts in the process.

Token holder growth: It has grown from around 3,000 token holders a few months ago to 79,000 today, the fastest growth on Solana (also available on Base and Ethereum).

Resilience: It had multiple corrections of more than 70% before going parabolic a few months ago. It is down about 50% from its peak price of $0.94 per token. It has been range bound between $0.49 and $0.72 for the past seven weeks.

Whales: SPX has over 44,000 holders of $10k+ on Solana alone. That’s almost half of WIF and more than half of Bonk (both of which have 5x the market cap). It has nearly a third of Pepe’s number of token holders over $100k and $1m. Pepe’s market cap is 13.4x that of SPX.

Global Marketplace: With simple ideas that anyone can understand. Currently trading on KuCoin (Asia) and Bybit (UAE), Solana, Ethereum, and Base DEX.

Slogans: "Turn the Stock Market Around" and "Stop Trading, Believe in Something".

Ridiculous price prediction: Murad’s target is $100 billion. Note that Doge reached $90 billion in the last cycle, so let’s dream big.

That is my point. Please note that I have no affiliation with SPX6900 or anyone associated with the project. Investing in cryptocurrencies is very risky. Memecoin is at the far end of the risk curve. The way we query and analyze data may be flawed, and the analysis may be wrong. And SPX6900 may fall to zero very soon.

Note that my data source is a private dune dashboard coupled with Holderscan. I am working on more data and hope to share it soon.

7. Conclusion

A local peak or an all-out sprint to the end of the year?

This is the question we mentioned at the beginning. Everyone wants to know where we will be at the end of the year. I am not a trader, nor one who pays too much attention to short-term price action, but I believe it is possible for Bitcoin to move higher from here - possibly into the $120,000 range before Christmas.

I'm not 100 percent convinced. I'm always looking at volatility. But I do think that Bitcoin prices will go higher in 2025.

Of course, we are also watching the broader economic situation. Global liquidity is currently showing some bearish signals. The US dollar index has retreated from its high of 108 local times, but it is still at a high level. CPI data will be released on December 12, and the Federal Reserve will hold a rate meeting on December 18.

As always, please do your own research. Expect a lot of volatility. Don't invest in anything you can't afford to lose.