Institutional dominance is a sign of the early stage of the bull cycle.

4 key signs we are in the early bull market phase

Uncover insights into the bull market with this snippet of Sygnum’s Crypto Market Outlook 2024, which highlights four key indicators signaling that we are still in the early phases.

1. Institutions are driving the market
The institutional dominance is a sign of the early stage of the bull cycle.

The CME, the regulated trading venue for crypto derivatives favoured by institutions, saw a substantial increase in Bitcoin futures open interest, with the CME’s market share overtaking Binance at the end of 2023. This suggests that institutions have been driving the rally – as is often the case in the early stages of bull markets.


Crypto’s portfolio diversification benefits are also increasingly considered by institutions, as the correlation with other asset classes reverted to its low historic norms. Meanwhile, the list of corporations offering cryptocurrencies as a payment option is growing, including high-end brands such as Gucci and Ferrari, and statements supportive of crypto continue to be made by leading figures of traditional finance, such as BlackRock CEO Larry Fink.

2. Retail interest is lagging
Retail flows lag far behind the levels prior to the bear market.

Although inflows into retail products increased towards the end of 2023, they are still muted.


High levels of retail inflows are typical in the later stages of bull markets, and the lack of frothy retail interest suggests that the current cycle is still in its early phase.

Another indication of the still relatively low engagement of retail investors is that while Google search volumes for “Bitcoin” and “crypto” increased towards the end of 2023, they are still far from the levels seen at market peaks.

As major financial institutions continue building their crypto capabilities, a wider range of investment products are expected to be available for retail investors to access the crypto market, including the recently approved ETFs by BlackRock, Fidelity and others, supporting the next phase of the market cycle.

3. Strong conviction
There is no selling from long-term holders.

The increase in long-term holdings of Bitcoin is a further sign that the current bullish cycle is in its early stages. With the share of long-term holders at an all-time high, there are no signs of profit-taking despite Bitcoin’s strong performance last year.

The lack of selling pressure suggests crypto investors expect the rally to continue. This is underscored by extremely bullish forecasts and high price targets published by a number of financial institutions and analysts, with the consensus expectation that the market will make new highs in this cycle – as it has done in previous cycles.

4. The pattern of past cycles
Past crypto market cycles followed similar patterns.

Past bull markets have lasted 1.5–2 years and have followed a similar pattern in terms of bitcoin dominance vs a growth in applications, accumulation by long-term holders vs the entry of new investors, the growth in coin age vs profit-taking, and in the later cycles, institutional vs retail buying.

The current phase of the market fits the pattern of the earlier phases of past cycles, with accumulation slowly giving way to growth.

Apart from technical indicators, the broadening of the rally with a revival of venture capital investments funding innovation, the emergence of new use cases and viral adoption of some applications would be signs that we are in a broad-based, lasting bull market.

Disappointment on ETF inflows would be a blow.

We do not see the macro environment as presenting substantial risks to crypto as both a fresh cycle of easy money or signs of serious cracks in the system would be supportive.

However, if there is disappointment regarding the key factors that have driven the market, that could stall the rally. With expectations of high inflows into the new ETFs, a different outcome would be a
serious blow.

The bull market may also disappoint if it remains limited to the largest tokens supported by ETF approvals and by a virtuous cycle of greater on-chain activity supporting protocols and increased liquidity supporting DeFi and CeFi. For the next bull market to resemble prior cycles, viral use cases are also necessary. There are promising signs in certain sectors of the market, but these trends need to develop further in 2024.

Katalin Tischhauser - Sygnum Crypto Market Outlook 2024

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