The first half of 2021 has finally come to an end after a strong bull vortex followed by equally catastrophic market corrections. Bitcoin has set a new ATH, but similar to 2017, it can’t hold its fortress at the top much longer.

We saw the organizers pile up, but the appearance of the first Death Cross since March 2020 stifled the positive mood. The first half of 2021 is over and now it is important to understand and assess what could happen in phase 2.

Bitcoin price surge during the year 2021 NoWhat is the actual mania?

After Bitcoin fell below $ 30,000 in June, mainstream media were quick to claim that BTC lost all of its profits in 2021. Statistically that’s true, but it’s extreme and almost ignores the previous cycle.

Price forecast BTC / USDT in the months and years to come | Source: Trade view

When analyzing the first half of 2021, it can be observed that the digital asset grew 21.16% between January 1 and June 30. Now the returns look pretty low after BTC established a strong bullish phase. However, the actual growth becomes more apparent when the cycle is analyzed from the beginning. October 2020 marked the start of BTC’s bull cycle, with the chart on the right illustrating Bitcoin’s 445% growth through May 19th.

Meanwhile, Bitcoin is only down 42%, a negligible number considering the growth over the cycle.

Therefore, it is unfair to analyze BTC’s upside based solely on its performance over the last 6 months of 2021. However, the data is subjective and the chain fundamentals are currently pointing the best direction for the second half of the year. Overall, BTC’s bullish structure remains stable.

Bitcoin MVRV and SOPR reset, time to collect?

The MVRV is one of the leading indicators used to determine the cumulative margin for Bitcoin, calculated by dividing the market capitalization of BTC by the actual market capitalization.

Bitcoin MVRV | source: Coinmetrics

Historically, every time the MVRV reaches 1 or below it has proven to be an important reversal zone. At the time of writing, the Bitcoin MVRV is currently trading at 1.35, underscoring the possibility of a bull market in the coming weeks.

The spend output ratio (SOPR), a metric that shows whether buyers are selling at a profit or loss, also stays below 1 – a sign that sellers have given up. Such an event did not last the last two periods of decline.

BTC HODL wave | source: Coinmetrics

Finally, the Bitcoin HODL wave shows that long-term owners of the current rally have a stronger grip on the market than it did in 2017. In 2017, the market peaked when supply was held long in the previous cycle was only 38% of BTC supply held for 180 days or less.

It can be deduced from this that the current rally can be traced back to the retail sector and that the potential high has not yet been reached in terms of value.

The relaxation mentality has emerged. Fundamental on-chain indicators take time to make themselves felt in price developments, and Bitcoin continues to trade with relative uncertainty. However, selling pressures are starting to ease and a new quarter could start the road to recovery in the coming weeks, provided that no external disruptions affect the structure of the market.

Elon Musk’s FUD puzzles and Hashrat ktwo waterfalls?

The first critical event that sparked Bitcoin’s demise was Elon Musk’s launch of an environmental, social and governance (ESD) investigation to make Bitcoin greener. Perhaps the Tesla CEO himself did not expect Bitcoin supporters to hate him to the extreme. To refute this claim, analysts need to provide data on how much of Bitcoin is being mined using cleaner forms of energy. However, one of the largest mining companies in China is already using coal as an energy source and this leads directly to the dilemma of the mining ban in the Asian provinces.

In the past few weeks, China has cracked down on organizations and mining companies, restricting financial institutions and cryptocurrency-related payments. The country’s first bitcoin exchange, BTC China (BTCC), has also reportedly recently confirmed that it will shut down amid China’s crackdown on bitcoin mining. This eventually led to a decrease in hashrate and the closure of key mining operations.

Well, both factors are negative news, but it’s important to keep in mind that both are temporary. According to the Bitcoin Mining Council, held on July 1, in the second quarter of 2021, around 56% of all mining activities were within sustainable limits.

When it comes to mining, the miners will find an alternative at some point, the system will adapt accordingly and the Bitcoin hashrate will return to normal. The only thing to avoid in order to remain bullish is silence or a lack of mood.

At the moment, the lack of mood may sound negative, but the potential impact is enormous. CME’s most recent Commitment of Traders report shows that the Open Interest (OI) of Bitcoin futures has continued to decline in recent weeks and the volume has remained stable.

Open Interest and Volume of CME Bitcoin Futures | source: Econometrics

At the moment, the lack of sentiment on the derivatives platform is good as it creates low volatility as Bitcoin struggles to break the $ 30,000 threshold. It’s true that the leading digital asset has done well in times of high volatility if it reverses in times of high volatility, but right now it may be better to recover naturally rather than relying on speculation and catalysts.

You can see the Bitcoin price here.

Minh Anh

According to AZCoin News

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