Bitcoin May Follow Slow Bull Trend, Institutional Participation Key

Benson Sun, a well-known cryptocurrency expert and former FTX community partner, predicts that Bitcoin's current market trend may follow a slow bull pattern, characterized by gradual increases in price rather than rapid spikes seen in previous cycles.

According to Benson Sun, the current market has shifted from individual investors to institutional players such as publicly traded companies, exchange-traded funds (ETFs), and corporate treasuries. As a result, the traditional indicators of a market top, including high levels of funding costs and MVRV Z-Score, may not be as pronounced.

Instead, Benson Sun suggests that institutions' lack of follow-through in buying, combined with decreased liquidity, could signal the beginning of a new cycle. He proposes using the Institutional Liquidity Index (ILI) to gauge institutional participation. When Bitcoin reaches a new high but the ILI does not rise simultaneously, it constitutes a yellow divergence; when both Bitcoin and the ILI show red divergences, it is a warning sign.

Benson Sun advises adjusting portfolio allocations in response to these divergences: if a yellow divergence appears, he recommends reducing altcoin positions and leverage. If a red divergence occurs, he suggests stopping all investment activity altogether.