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Why Bitcoin Won’t Enter a Bear Market in 2024, According to CryptoQuant

CryptoQuant CEO Ki Young Ju explains why Bitcoin is unlikely to enter a bear market in 2024. Learn about key cost basis levels, institutional adoption, Bitcoin ETFs, and historical price trends keeping BTC bullish.

Bitcoin (BTC) has historically gone through multiple boom-and-bust cycles, experiencing massive rallies followed by sharp corrections. This pattern has led many investors to wonder whether the next bear market is imminent. However, according to Ki Young Ju, CEO of CryptoQuant, 2024 is unlikely to witness a full-fledged bear market. His analysis, based on historical price trends, key cost basis levels, and institutional adoption, suggests that while corrections may occur, Bitcoin will remain in a bullish phase. The combination of long-term holding trends, increased institutional participation, and historical price resilience indicates that Bitcoin's fundamentals remain strong. Additionally, external factors such as macroeconomic conditions and regulatory developments may play a role in reinforcing Bitcoin’s upward momentum. Let’s examine why CryptoQuant believes the Bitcoin bull market will persist in 2024.

Table of Contents

Key Factors Supporting a Prolonged Bitcoin Bull Market

1. Historical Cost Basis Levels as Bear Market Indicators

Ki Young Ju identifies critical cost basis levels that have historically signaled the transition into bear markets. These levels help investors determine whether Bitcoin is at risk of entering a prolonged downtrend.

  • ETFs/Custody Wallets: $89,000 – This represents the cost basis of institutions holding Bitcoin in exchange-traded funds and custody wallets, which tend to have a long-term investment approach. If BTC remains above this level, institutional confidence remains intact.

  • Binance Traders: $59,000 – This reflects the average cost basis of traders on Binance, one of the largest crypto exchanges. A dip below this level could indicate increased selling pressure from retail traders.

  • Mining Companies: $57,000 – Historically, when Bitcoin has dropped below this threshold (as seen in May 2022, March 2020, and November 2018), it has confirmed the onset of a bear market.

  • Old Whales: $25,000 – Long-term Bitcoin holders ("whales") have never seen their cost basis breached in Bitcoin’s history. This level represents a strong floor for Bitcoin’s price, as whales tend to accumulate rather than sell at such low levels.

Ju argues that unless Bitcoin falls significantly below $57,000, a full bear market is unlikely. This suggests that Bitcoin has substantial support levels that could prevent extreme downturns. Additionally, long-term holding trends show that whales and institutions continue to accumulate BTC, further reinforcing market stability.

2. Institutional Holdings and MicroStrategy’s Strong Position

Institutional investors have played a pivotal role in Bitcoin’s price movements over the past few years. Unlike retail traders, institutions tend to take a long-term approach, making their cost basis levels crucial indicators of market sentiment.

One of the biggest institutional players is MicroStrategy, which has accumulated $45.91 billion worth of BTC, making it the largest corporate holder of Bitcoin in the world. The company’s average cost basis stands at $65,033, meaning Bitcoin would need to drop significantly before MicroStrategy experiences losses on its holdings. This indicates that the firm is unlikely to sell at current prices, adding stability to the market.

Additionally, Bitcoin ETFs have brought in billions of dollars from both retail and institutional investors, further reducing the likelihood of a steep sell-off. The presence of Bitcoin in regulated investment vehicles like ETFs makes it easier for pension funds, hedge funds, and large asset managers to invest, leading to stronger price support. The influx of institutional capital has also reduced market volatility, as these entities tend to buy and hold rather than engage in speculative trading.

Moreover, major financial firms such as BlackRock and Fidelity have been increasing their exposure to Bitcoin, adding credibility and legitimacy to the asset. As more institutions enter the market, Bitcoin’s volatility is expected to decrease, making a severe bear market less likely.

3. Bitcoin’s Bull Cycle Can Withstand Corrections

Bitcoin’s historical bull runs have never been smooth. They are often characterized by high volatility, with multiple pullbacks before reaching new all-time highs. This is a natural part of Bitcoin’s price discovery process.

Ki Young Ju believes that even a 30% drop from Bitcoin’s peak price does not indicate a bear market. For example, if Bitcoin reaches $110,000 and later falls to $77,000, this should be seen as a standard correction rather than a full reversal of the trend. In previous cycles, Bitcoin has experienced multiple corrections within a bull market, only to recover and set new highs.

In the 2017 bull run, Bitcoin saw a 40% drop before surging to new highs. Similarly, in the 2021 cycle, Bitcoin fell 35% multiple times before reaching its peak of $69,000. These past trends suggest that short-term volatility should not be mistaken for the beginning of a bear market.

Furthermore, on-chain metrics show that long-term holders continue to accumulate Bitcoin, rather than sell during dips. This indicates confidence in Bitcoin’s long-term potential, as seasoned investors are not shaken by short-term fluctuations. In addition, the Bitcoin halving event in April 2024 is expected to further limit supply, historically leading to significant price increases in the following months.

4. Current Market Performance and Trends

As of early 2024, Bitcoin’s price remains strong despite market fluctuations. BTC is currently trading around $95,930, which is down 12% from its all-time high of $108,786 (set in January 2024).

However, this decline is relatively minor compared to previous cycles. In 2021, Bitcoin dropped nearly 50% from its peak before rebounding to new highs, demonstrating that short-term dips do not necessarily indicate the start of a bear market. Historically, such corrections are common during extended bull runs, especially as early investors take profits.

Another key factor is the increased mainstream adoption of Bitcoin. Governments, corporations, and financial institutions continue to integrate Bitcoin into their operations, further strengthening its position as a mainstream asset. Additionally, Bitcoin’s network fundamentals, such as hash rate and active addresses, remain at all-time highs, signaling strong user engagement and network security.

Global economic factors also play a role in Bitcoin’s resilience. With rising inflation and continued interest in alternative assets, many investors see Bitcoin as a hedge against economic uncertainty. This has led to increased demand from both retail and institutional investors, further reducing the chances of a prolonged bear market.

5. The Role of ETFs and Market Maturity

The introduction of Bitcoin exchange-traded funds (ETFs) in early 2024 has had a transformative impact on the market. ETFs provide an accessible and regulated way for traditional investors to gain exposure to Bitcoin without the complexities of self-custody.

Since their approval, Bitcoin ETFs have attracted billions of dollars in inflows, demonstrating strong investor demand. Unlike speculative retail investors who frequently trade in and out of the market, ETF investors tend to adopt a buy-and-hold strategy, contributing to Bitcoin’s price stability.

Additionally, Bitcoin’s market is far more mature and resilient than in previous cycles. The presence of institutional liquidity, improved regulatory clarity, and stronger infrastructure (such as custodial solutions and derivatives markets) makes Bitcoin less susceptible to extreme crashes.

The integration of Bitcoin into financial products also reduces the risk of manipulation and panic-driven sell-offs. With more institutional and mainstream adoption, Bitcoin’s price movements are likely to become more stable over time, decreasing the likelihood of a severe bear market.

Conclusion

While short-term price corrections are expected, CryptoQuant’s analysis suggests that Bitcoin is unlikely to enter a full bear market in 2024. Strong institutional backing, key support levels, and historical price behavior all indicate that Bitcoin remains in a bullish cycle.

Investors should be prepared for volatility, but they should not mistake price dips for the end of the bull run. The combination of ETF adoption, institutional accumulation, and long-term holder confidence reinforces Bitcoin’s long-term potential. Additionally, with the upcoming halving event reducing supply, Bitcoin’s bullish momentum could extend well into 2025.

FAQs

What defines a Bitcoin bear market?

A Bitcoin bear market is characterized by a prolonged price decline of more than 20-30% from its peak, accompanied by lower trading volumes, reduced investor confidence, and negative sentiment. In past cycles, bear markets have lasted several months to years, with BTC dropping over 80% from its all-time high (ATH).

Why does CryptoQuant believe Bitcoin won’t enter a bear market in 2024?

CryptoQuant’s CEO, Ki Young Ju, cites historical price patterns, strong institutional accumulation, and key cost basis levels as evidence that Bitcoin is unlikely to experience a full bear market. Unless Bitcoin falls below $57,000, it remains in a bullish cycle.

How do Bitcoin ETFs contribute to price stability?

Bitcoin ETFs provide institutional and retail investors with an easier way to invest, leading to higher liquidity and reduced volatility. Unlike speculative traders, ETF investors tend to hold Bitcoin for the long term, preventing panic-driven sell-offs.

What role does MicroStrategy play in Bitcoin’s market stability?

MicroStrategy holds over $45.91 billion worth of Bitcoin with an average cost basis of $65,033. Since the firm is unlikely to sell at a loss, its holdings act as a strong price support level, reducing the chances of a market crash.

That's all for today, see ya tomorrow! If you want more, be sure to follow our X (@croxroadnewsco), Instagram (@croxroadnews.co), Youtube (@thebitcoinlibertarian), Tiktok (@croxroadnews) and nostr - [email protected]

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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