Bitcoin has recently reached a new high early in its cycle, surpassing previous peaks before the much-anticipated halving event. The surge in price is mainly due to institutional demand, hinting at a positive future for the cryptocurrency. Earlier this year, transactions spiked to record levels amidst the excitement surrounding ordinals and Runes, indicating a strong and growing interest in Bitcoin.
Analysts are puzzled by the current state of Bitcoin. Let’s delve into the details. The cryptocurrency’s price has hit a new high early in the cycle, driven by institutional demand. While this may seem like a positive sign at first glance, the situation is more complex than it appears.
Institutional investors are heavily involved, and Bitcoin network activity is high, typically signaling a bullish market. However, the key issue lies in the lack of new participants entering the market, despite the positive signs. This decline in new users is alarming, dropping to levels not seen since the bear market of 2018.
The decrease in new Bitcoin users raises concerns as their growth is essential for driving crypto bull markets. The current absence of retail investors loading up on Bitcoin raises a crucial question – why aren’t they getting involved? Retail investor enthusiasm is usually a driving factor in crypto bull markets, making the lack of participation a significant anomaly.
While Bitcoin’s early price surge and increased network activity fueled by institutional demand paint a promising picture, the absence of new user growth and retail investor enthusiasm presents a challenging puzzle for analysts. This uncertainty leaves the future trajectory of Bitcoin up in the air.