Just as the seasons change, the sentiment in the crypto market appears to be shifting. Many indicators suggest that a looming bull run could just be on the horizon. This notion is reiterated by Delphi Digital’s co-founder, Kevin Kelly, who holds the view that the crypto markets are governed by phases that are both cyclical and predictable.
Interestingly, Kelly bases his predictions not only on the typical crypto market indicators but also on the performance of the U.S manufacturing index. Maintaining a unique argument, Kelly believes that peaks in the BTC cycle occur simultaneously with peaks in the Institute of Supply Management (ISM) manufacturing index. This index is crucial, as it measures the health of the manufacturing and service sectors in the U.S.
Kelly contends that various indicators associated with Bitcoin have historically peaked at the same time as the ISM index. Active addresses, total transaction volumes, and total fees have all mirrored the course of the ISM, he added.
However, it’s essential to interject a note of caution here – while past patterns can provide useful context, they don’t necessarily predict future outcomes. Furthermore, while risk appetite often increases during business cycle recovery phases, market growth doesn’t automatically imply profit for every participant.
Bearing the above in mind, the implications for the future of crypto markets could be profound. Several factors could potentially disrupt the lethargy that the crypto markets have seen for the past five months, including ETF approvals, an end to rate hikes, and Ethereum scaling upgrades. These attributes, coupled with an end to the two-year downturn trend seen in the ISM index, might usher in a new cycle in the crypto market.
The crypto scope is not devoid of its typical drama, either. Recent events have seen Binance seek a protective order against the Securities and Exchange Commission (SEC). Following deposition notices and discovery requests from the SEC, Binance alleges that the commission has adopted a “fishing expedition” approach and demands far too much information irrelevant to customer assets.
It’s important to remember market changes come in waves, and while these observations bear the potential for significant growth in the crypto market, they are also ripe with inherent risks. It’s key to stay advised, vigilant, and never risk more than you’re prepared to lose – the blockchain future is looking brighter, but the route there is not always smooth sailing.