Happy Friday, friends! Is the Bull Market over or on the verge of epic continuation? Join us for Fundamentals Friday as we dive deep into the evidence and find what side of the market we should be on. 🧵

Let’s re-iterate a powerful metric: Bitcoin Balance on Exchanges. Currently, in January 2025, we have the lowest balance of Bitcoin on exchanges we’ve seen since January of 2019 - which was the bottom of the 2018/19 Bear Market.

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However, on the positive side, we analyze how this metric has helped predict Bitcoin’s price movements, whether bullish or bearish. We notice that since 2019, prolonged periods of Bitcoin Balance declining have led to bullish price action, and it’s only once the Balance on Exchanges begins to rise again that it calls the Euphoria Phase of the Market Cycle - when prices increase rapidly.

Secondly, the long-term holder distribution of Bitcoin seems to have peaked and is currently declining - reaching peaks we’ve seen in previous cycles. In the 2017 market cycle, this metric peaked in August of 2017, when we saw a pullback in Bitcoin’s price from $4,000 to $3,600 - then we continued to rally to $19,000.

In 2021, this metric peaked in January, which saw Bitcoin’s price pullback from $40,000 to $32,000 - we then rallied to $63,000.

In 2024, this metric peaked on Dec. 10th, which has seen Bitcoin’s price pullback from $105,000 to $90,000 - we then rallied to ???,??? in 2025.

Here’s to a frothy future!

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Enjoy today's Crypto Market Update:

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Enjoy today's Crypto Market Update: https://crackingcryptocurrency.com/learn/news-and-insights/crypto-market-update-january-10-2025

Liquidity and the order books are thin when the Exchange Balance is very low. This means price is subject not only to wild price swings (which is why being careful with leverage here is crucial) but also sets up price for rapid price appreciation if a surge of fresh buying comes in. 

However, the knife cuts both ways, as it also means less buy-side liquidity to absorb market sell orders.