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Start with Historical Data Bitcoin mining began in January 2009 and was halved on November 28, 2012. In the year before the halving, BTC ushered in a bull market, with the exchange rate of 10,000 bitcoins for two pizzas rising to $13 per pizza. After the halving in 2012, there was another bull market in April 2013, rising from $13 to around $250. Then there was an adjustment from April to October 2013. After the adjustment, there was another bull market, rising from $100 to around $1,100, an increase of more than 100 times. From January 2014, the whole year of 2014 was a bear market, and it continued to fall until January 2015. From January to August 2015, it was still in a consolidation stage - a flat market. From 2014 to 2015, it was a bear market for a full year and a half. From the end of August 2015 to December 2017, it rose for two consecutive years, and the price of the currency rose from $200 to $19,891 in December 2017. From December 2017 to February 2019, a full two years, BTC went through a perfect bear market. Since February 2019, BTC has experienced another bull market, rising from $3,400 to a high of $14,000. From the above data, we can see that BTC halved in 2012, and there was a three-year bull market from 2011 to 2013. BTC halved in 2016, and there was a three-year bull market from 2015 to 2017. The halving will happen in 2020, and the bull market should last from 2019 to 2021. Judging from the current price trend, it is very consistent with the rhythm of the previous two halvings, so we have reason to believe that the halving bull market will exist and has already begun. According to the latest SFOX statistics, Bitcoin's annual return in 2019 (93.80%) was higher than that of the S&P 500 and gold, and it recorded the lowest volatility in history (32.05%), while also showing a lack of correlation with the S&P 500 and gold. As we head into 2020, the SFOX Multi-Factor Market Index shows that the crypto market outlook remains neutral, and it is slightly moving away from a bear market and towards a bull market. Not only that, since the beginning of the new year, investors have been increasingly looking forward to the Bitcoin halving. The current market's expectations for the bull market caused by the Bitcoin halving event are mainly based on the consequences of the first two halvings. As can be seen from the figure below, after the first halving, BTC's all-time high (ATH) was broken 367 days later, and the BTC market price soared by 9,260%. After the second halving, the new ATH reached 526 days later, and the price rose by 2,976%. Despite comparisons with previous halving cycles and various factors such as Bitcoin’s increased market capitalization and weakened volatility in derivatives markets, many still believe that the third halving will definitely increase the price of Bitcoin by more than ten times. Based on calculations and analysis, the SFOX Multi-Factor Market Index, which was rated as neutral a month ago, remains neutral as of January 2. However, within the context of this rating, it has begun to move slightly out of the direction of the bearish state indicator (-1) towards the bullish direction of the indicator (+1). The monthly value of the index is determined by analyzing four market factors: price momentum, market sentiment, volatility and the ongoing development of the industry through professional, quantifiable indicators. By observing the 30-day historical volatility of BTC, ETH, BCH, LTC, BSV, etc., we found that the general crypto volatility decreased at the beginning of 2019, increased in the middle of the year, and decreased at the end of the year. BTC's volatility was 70.21% at the beginning of 2019, fell to 17.86% on April 1, climbed to 102.53% on July 20, and fell to 32.05% at the end of December. By viewing the 30-day historical volatility of ETH, BCH, LTC, BSV, etc. as a percentage of BTC’s 30-day historical volatility, we can see that altcoins have experienced several dramatic spikes in volatility that are unrelated to BTC’s movements throughout the year. In summary, BSV et al. appear to be the most prominent in terms of large volatility independent of BTC. Then on-chain data analysis Driven by the "halving market", halving currencies led by BSV took the lead, and projects ranked 10-50 in market value showed a strong upward trend, which in turn promoted the steady rise of Bitcoin and Ethereum. Tokenview counted the on-chain activity data in January 2020 and found some interesting points. In the past month, Bitcoin and Ethereum still ranked first and second in terms of the number of active addresses on the chain. The "halving camp" represented by Dash, ETC and BSV achieved good results. Dash's monthly active address number reached 3.083 million, followed by ETC, which ranked fourth with 2.714 million. If the number of active addresses can be compared to the "daily activity" on the Internet, then the number of new addresses can be roughly understood as "attracting new users". The data also reflects the above view. Bitcoin's king status is still difficult to shake for other projects. The three brothers of the halving market: DASH, ETH and BSV are all at the forefront. It is reasonable that Dogecoin, which has a large audience, and Komodo, which performed well last month, are in the top ten. As the only DPOS consensus project selected, EOS barely holds up the facade for this camp. In terms of the total transaction volume on the chain, Bitcoin once again demonstrated its unbeatable status, even though the transfer experience of latecomers has been smooth and seamless. The Bitcoin network processed a total of $271.279 billion worth of on-chain transactions in January, a number so large that the Excel software displayed the scientific notation of 2.71279E+11 by default. The fact that BCH and BSV ranked second and third respectively is enough to show everyone the strength of the Bitcoin consensus. On-chain activity often only reflects the fundamentals of the project and may have a certain delay in its relationship with the secondary market. Therefore, when deciding to perform certain operations, it is necessary to pay attention to more market signals and keep in mind the risks. It is worth noting that the upward trend of Bitcoin prices after halving is extended every once in a while. For traders seeking to maximize returns, they should note that this market cycle is not expected to end until 2022. (This article does not constitute any investment advice, the currency market is risky, and investment should be cautious) |
