Is the bull back? Grayscale announces reopening, cryptocurrency market rebounds

Barry Silbert, the head of Grayscale, the world's largest digital asset management company, has just posted this short slogan on Twitter, marking the reopening of Grayscale's cryptocurrency fund subscription. This seems to have sounded the clarion call for a major rebound in the crypto market.

As of press time, the cryptocurrency market is almost completely green, and mainstream assets such as Bitcoin and Ethereum have risen rapidly, with Bitcoin breaking through $36,000 and ETH breaking through $1,140.

Yesterday's blockchain scam vs. today's blockchain revolution

According to the data, there is growing evidence that yesterday's plunge was actually a benign adjustment in the market.

There is no doubt that the price surge achieved by Bitcoin in the past 3-4 months has been exponential. However, this surge is relatively low compared to the 2017 bull run, which saw Bitcoin surge 228% in 34 days, while the current bull run has surged 125% in 27 days.

BTC/USD Trading View

Therein lies the problem, a hidden danger of a bull run like this is that there has been no major correction so yesterday’s market crash seemed inevitable. This crash could turn into a benign price correction, setting the stage for the next rally.

In fact, yesterday’s drop was the second-largest since the Black Thursday drop in March 2020, when the daily drop was 39%. In total, $2.74 billion in positions were liquidated in the futures market during yesterday’s plunge.

Whenever there is a sharp drop, there is a question that lingers in the minds of investors - whether this drop is worth adding to positions/accumulating more Bitcoin.

Number of addresses holding more than 1,000 BTC

Amid this plunge, the number of Bitcoin addresses holding 1,000 BTC continues to rise and shows no signs of stopping. This shows that investors have not lost confidence. Since December 2020, the number of addresses holding 1,000 BTC has grown by 4%.

The miners’ holdings index shows that the miners that caused the decline have completed their shipments, which can be seen from the decline of the MPI to a neutral state.

With Bitcoin mining difficulty hitting an all-time high, it is difficult for small miners to compete with large mining farms. If this were the case, then small miners would need to liquidate their holdings, pushing the price down further. However, this is not the case, as this Bitcoin mining difficulty adjustment will cause small miners to shut down their farms, resulting in a decrease in hashrate and an equal adjustment in difficulty in the future.

Furthermore, before this bull run began, Bitcoin had been in a bear market for nearly three years, and it makes perfect sense for the price to continue to rise, rather than entering a bear market like in 2019. However, the difference between this rally and the 2019s is the influx of institutional money into Bitcoin.