On-chain analyst Willy Woo argues that fundamentals will drive the true cryptocurrency bull run. Traditional finance will be shocked when the Bitcoin macro index surpasses a certain threshold.
Woo predicts that a rise in the Bitcoin Macro index signals the start of a new bull market.
Why the bull market hasn't arrived yet
Woo reflected that cryptocurrencies will enter a true bull run when fundamental factors drive prices. Previous bull market analysis reveals that this phenomenon occurs when the Bitcoin macro index crosses a certain threshold.
Bitcoin Macro Index Absorbs Fundamental and Technical Analysis in machine learning models which give a broader view of where an asset is placed in a given cycle. The model calibrates the influence of each metric on the bigger picture by looking at how much information the metric previously contributed to Bitcoin's performance.
Court suggests that based on the model's past performance, the cryptocurrency bull market is still far away.
โSo you think we're in a bull market? We are not, this has been the warm-up. A fundamentals-driven bull market is marked by a breakout of the upper blue band. When it breaks, TradFi will be shocked,โ Woo said.
Read more: Bitcoin Price Prediction 2024/2025/2030
The last bull market, for example, benefited from pandemic stimulus money and low interest rates. Speculative trading gained popularity as homebound workers saw cryptocurrencies as a way to make easy money.
This market is slightly different, as interest rates are higher and borrowing has fallen. However, high interest rates make investing in long-term financial products an attractive option. Entries in ETFs that are part of largest crypto wallets They suggest that while Bitcoin is booming, it may form small parts of investors' portfolios compared to assets that can benefit from high interest rates.
How Macroeconomic Fundamentals Drive Bitcoin
Willy Woo's statement indicates the importance of looking at past cycles when evaluating the current market. The US Federal Reserve's decisions, for example, to adjust interest rates since March, are fundamental factors that have influenced the price of Bitcoin in different ways as the cycle has lengthened.
The decision to raise rates began in March 2022 and continued until mid-2023. The severity and speed of the initial rate cuts saw the price of Bitcoin drop dramatically. Later, the collapses of Land moonFTX and other projects lowered the price further.
However, Bitcoin has historically proven to be less sensitive to interest rate policies the longer the interest rate cycles. For example, 11 months after the cycle, Bitcoin and the S&P 500 negatively correlated for the first time since the collapse of FTX.
Read more: What are cryptocurrency trading patterns? A basic introduction
Now, almost two years into the tightening cycle, technical analyst Rekt Capital expects cryptocurrencies to enter their next bull run in about a year and a half. Except for a shock like FTX Collapse, cycles discovered through technical analysis generally repeat. Some cryptocurrency traders prefer the Bitcoin Rainbow Chart when planning when they will invest.
If Rekt Capital's analysis comes true, a bull market will begin in April and end between September and October 2025.
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