Bitcoin may trade “higher” in the next 18 months: analyst

The crypto bear market is officially over and Bitcoin (BTC) will move “higher” in the next 18 to 24 months, according to Will Clement, a well-known business analyst and co-founder of Reflexivity Research.

In a thread posted on X on Wednesday, the trader highlighted various on-chain signs that crypto revenues are coming back and that BTC is due for a resurgence.

Return of Bitcoin

One sign of bullishness lies in Bitcoin's “realized market value” – the total value of all BTC based on the price at which they last moved.

In May, the 180-day change in the actual cap turned positive, “indicating net outflows,” according to Clements. A similar trend can be seen when looking at the spending base of long-term and short-term bitcoin holders, where short-term holders returned to greater spending than HODLers in March.

“The confirmed capital/price increase is important because it shows that new money is coming in, but the value of the network is increasing,” Clemente wrote. “The higher the price base, the higher the marginal transaction price can go without creating a strong incentive for participants to take profits.”

Stablecoin dynamics have also changed: the overall market value of dollar-backed crypto has been increasing over the past 90 days, indicating an increase in investor appetite for synthetic dollars that provide easy access to the crypto market.

Between regulatory uncertainty and unstable postings for various tokens, this metric has been net negative for the past 1.5 years.

Don't get too excited, analysts warn

After months of hovering around $30,000, bitcoin soared above $44,500 per coin in November and early December. Among the theoretical reasons for the asset's rise is the approval of several Bitcoin spot ETFs next month, which will pave the way for more institutional capital to enter the Bitcoin market.

“While we are seeing the first signs of potentially accelerating capital inflows through ETFs, over 70% of Bitcoin's supply has not moved in >1 year,” Clement wrote.

Although the fundamentals look good, Clemente cautioned that bitcoin will undergo several price corrections as it moves higher.

On-chain analyst James Cheek issued a similar warning last week, suggesting that there is still room for many investors to profit from Bitcoin at its current price level. “A break of a few months allows investors to re-examine the price base above the true market average,” he said.