According to Kevin Kelly, the co-founder of Delphi Digital, several on-chain metrics and charts are indicating the potential beginning of a new crypto bull market cycle. Kelly stated that the crypto market is cyclical and predictable, which has significant implications for its future. He highlighted that risk assets like stocks and cryptocurrencies have been signaling this new cycle throughout the year.
To support his claims, Kelly shared a chart dated August 8 from Delphi Digital, which showcased the distinct patterns in Bitcoin’s four-year cycles. These patterns have reliably repeated in the last three cycles, with Bitcoin experiencing an 80% drawdown in the first year, recovering over two years to prior highs, and then rallying to a new all-time high in the fourth year.
Furthermore, Kelly pointed out that Bitcoin cycle peaks typically coincide with the peaks in the Institute of Supply Management (ISM) manufacturing index. This index tracks the health of the manufacturing and service sectors in the United States. According to Kelly, BTC price peaks align with signs of topping out in the ISM. He observed that active addresses, total transaction volumes, and total fees also peaked during the same periods. A chart from Delphi Digital comparing BTC price and the ISM PMI supported this observation.
Kelly explained that when the business cycle shows signs of recovery, the crypto market tends to follow suit. He emphasized that turning points in the business cycle have historically presented opportunities to increase risk exposure. Kelly believes that the ISM is nearing the final stages of its two-year downtrend, which risk assets have already been anticipating.
While the Bitcoin and crypto markets have been relatively stagnant for the past few months, analysts suggest that several fundamental factors could revive them from their hibernation. These factors include the potential approval of ETFs (Exchange-Traded Funds), the end of rate hikes, and an Ethereum scaling upgrade. These developments could act as catalysts to stimulate market growth and activity.
In conclusion, Kevin Kelly’s analysis of on-chain metrics and charts indicates the potential beginning of a new crypto bull market cycle. He emphasizes the cyclical nature of the crypto market and its predictability, which has significant implications for the future. The correlation between Bitcoin cycle peaks and the ISM manufacturing index strengthens his argument. Additionally, analysts believe that fundamental factors such as ETF approvals and upgrades in the Ethereum network could help break the current stagnation in the crypto market.