Here’s Why The Bitcoin Bull Run Isn’t Done Yet

CNBC’s Brian Kelly builds the Bitcoin bull case by referencing a divergent metric that, in the past, foreran the calm before a price storm.

Uncertainty reigns, and market sentiment is extremely fearful. As such, the narrative of a return to crypto winter is strong. However, Kelly’s analysis leads him to believe it’s time to buckle up for a breakout.

Bitcoin Bull Run Still On Track

From peak to trough, a 54% drop from its $65k all-time high was sufficient to spook the market. Short-term investors exited their positions, at a loss, for fear of further downside.

Bitcoin’s flat performance hasn’t helped the matter since its price bottomed at $29k. For the last two weeks or so, BTC has been range-bound on the daily close between $35k and $41k.

Bitcoin daily chart

Source: BTCUSD on TradingView.com

Although the start of this week resulted in consecutive daily gains, a rejection near $38k on Tuesday has added to the narrative that the bear market is back.

However, CNBC’s Brian Kelly builds the bull case by referring to the rate of Bitcoin address growth compared to expected address growth. He noted that actual address growth is holding flat, whereas expected address growth has nosedived.

Bitcoin addresses, actual vs. expected

Source: CNBC Television on YouTube.com

“For me, when you look at Bitcoin it’s all about network effect and really about address growth. So, one of the key metrics I look at when I’m managing crypto money is how fast addresses are growing versus what the market is expecting.”

Kelly points out the last time a similar divergence in addresses happened was March 2020, during the “Corona-Crash.” The resultant price action saw a +1,750% move over 13 months, peaking at $65k.

“Generally, when Bitcoin gets that mispriced is a sign of that bottoming process. So, we look back at March 2020 when we had a massive divergence, that’s when Bitcoin was thirty five hundred and it roared to sixty five thousand.”

In supporting this view, Kelly mentioned that the fundamentals remain the same in…

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