In the last year, there have been substantial returns, increased acceptance of non-fungible tokens (NFTs), and a developing crypto industry, all of which indicate that Bitcoin (BTC) may be ready for a major cycle to occur.
“We’ve seen platforms accelerating, we’ve seen the rise of NFTs, and we’ve seen the ecosystem grow even more, which means that the adoption is growing heavily to and that is something that goes exponential. So the actual big gains or most of the gains are made at the last part of the cycle.”
Bitcoin is in a similar stage to dot-com bubble
According to Poppe, the market is witnessing fundamental adoption analogous to the dot-com bubble. Not just via different nations but also through individuals seeking a better annual percentage rate (APR) through DeFi or simply utilizing a transfer or crypto to move their money from one country to another.
The second reason he gave is that institutions are developing financial instruments in order to establish themselves in the markets; on top of that, there are the levels of record inflation, which he highlighted crypto as one of the best assets to invest in as a hedge.
“The fact that institutions are creating financial instruments to actually bring itself into the markets and then we still overall have that inflation discussion topic in which crypto is one of the best assets to jump into,” he said.
Money is made in the last part of the cycle
The trading expert highlighted that “in a true run of the markets, the actual money is made in the last part of the cycle,” regarding this, he identified key on-chain metrics which suggest Bitcoin is still in an interesting zone.
“The MVRV [Market Value to Realized Value] ratio is currently showing that we’re now nowhere near an overvaluation, and it’s actually showing that the previous run to $69,000 didn’t even show Bitcoin hype in euphoria which was actually the case in the first run in which we saw the hype accelerate quite fast and overall media attention started to grow.”
“But the indications of the MVRV feed ratio show that we are currently just acting at the lower bounds instead of at, the higher bounds so this is another conclusion or confirmation that we are actually getting at the interesting zones.”
Long-term holder supply is a crucial indicator
Finally, Poppe analyzed why the valuation of Bitcoin is relatively low compared to the true valuation at this stage. The crypto analyst stressed the long-term holder supply combines with the fact that BTC is at a low valuation because long-term holders are accumulating their positions slowly as the market is climbing back up.
“With the long-term holder supply, the moment that we get into a hyped version or that we start to accelerate quite fast, you can see that all those indicators are getting into hype territory. Sentiment overall becomes bullish, and then the long-term holders are starting to sell off.”
This he highlighted is the period he noted traders should be looking to actually start decreasing their positions or start to think about doing so. Ultimately he considers Bitcoin is ready for a big bull run and that one should be looking for longs rather than shorts when trading it.
Watch the video: Michaël van de Poppe considers potential bull run
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