The broader crypto market continued to trade mixed on Thursday as Bitcoin (BTC) and other recent high flyers consolidated while traders moved to accumulate tokens that they think will make gains in the coming months as the Bitcoin halving approaches. 

Stocks recovered from Wednesday’s sell-off as investors digested Federal Reserve Chair Powell’s comments on interest rates and decided to continue with their risk-on approach despite the prospect that a rate cut may not come until May at the earliest. 

Both the DXY and U.S. 10-year Treasury yield declined on Thursday, which benefited stocks. At the closing bell, the S&P, Dow, and Nasdaq were all in the green, up 1.25%, 0.97%, and 1.30%, respectively. 

Data provided by TradingView shows that Bitcoin traded in a range between $41,865 and $43,265, with bulls and bears evenly matched in strength, leading to a stalemate. 

BTC/USD Chart by TradingView

According to Blocktower founder and CIO Ari Paul, despite the price rise since October and the focus on spot Bitcoin ETFs, the level of hype and speculation around crypto is not overly elevated, which suggests that the market is positioned for a bullish continuation. 

“On the crypto ‘idiosyncratic’ side, we see very low leverage levels, neutral sentiment, and healthy market positioning,” Paul tweeted. “I think the pattern matching of the ETF approval to previous events like the 2017 futures listing are bad analogies; all of those comparable events occurred far later in the bull cycle in context of far greater bullish leverage and hype. [In my opinion], we’re in medium time frame bull trend, prices likely higher in 6 months.”

He said his outlook comes down to the basics of supply and demand. 

“If I frame this in supply/demand terms: we’re currently in a market dynamic of slow institutional adoption and new user onboarding,” Paul said. “There’s also daily outflows from mining, exchange fees, hacks, etc. All of the ‘overhangs’ that I’m aware of for BTC and ETH are fairly light (like Celsius ETH holdings being liquidated).”

“I think very likely demand keeps overwhelming it with similar dynamics to the past 12 months,” he added. “Something like Solana [is] arguably trickier given how much FTX estate has to liquidate.”

Likening the current atmosphere in the crypto market to bull market cycles witnessed in stocks, Paul said we are currently at the stage of institutional accumulation. 

“I’d say: bull cycles follow a common pattern that starts with insider buying then institutional, then retail,” he said. “I think we’re in early-mid institutional based on fund flows and adoption metrics. The 4th inning of a 9-inning bull cycle. So unless we get a ‘shock,’ I expect us to move through the next 5 innings of [the] bull cycle.”

While the conversation in the crypto community is centered around the Bitcoin halving or the potential approval of a spot Ether ETF as being the next driver of momentum, Paul said no additional catalysts are needed. 

“I put a lot of weight on a high level market cycle heuristic I use that describes the path of typical bull markets across centuries and asset classes. Emphasis on ‘typical,’ this is all just probabilistic pattern matching,” he said. “Within that pattern, this looks like 4th inning of a bull cycle to me.” 

“From a technical analysis perspective, we’re in a medium time frame bull trend, so no catalysts [are] necessary if I’m right in assessing the current dynamic,” he added. “A little like gravity in Einstein’s formulation – with no force, the natural path is for objects to follow a curved spacetime. In markets, if you’re in a bull trend or bear trend, then absent catalysts, the best bet is that [the] trend will continue for at least the next incremental time unit.”

Altcoins trade mixed, exchange tokens take a beating

Altcoins traded mixed, with an even number of winners and losers among the top 200 tokens. 

Daily cryptocurrency market performance. Source: Coin360

Pyth Network (PYTH) led the field with an increase of 10.9%, followed by a gain of 10.75% for Chainlink (LINK), and a 7.7% increase for ApeCoin (APE). A trio of exchange tokens led the losers, with FTX Token (FTT) falling 13.6%, LCX (LCX) declining by 8.7%, and Huobi Token (HT) losing 8.3%. 

The overall cryptocurrency market cap now stands at $1.64 trillion, and Bitcoin’s dominance rate is 51.4%.