According to Cosar, the Growth Rate Difference metric helps evaluate investor behavior (whether the market is overly pessimistic or optimistic) and the different market cycles. The indicator also helps to identify the correlation between actual value growth and price growth, while assessing the sustainability of a price trend.
The negative (red) zone correlates with bearish market conditions and major price corrections, as more investors offload their assets. With prices dropping and increased loss realization, investor confidence in the market begins to decline.
The highlighted chart shows that the Bitcoin price just witnessed a shift from red (bear market) to green (bull market) in recent days. Cosar believes that this change implies a potential parabolic rise in the price of BTC — as seen in the gold price over the past few months.
Two months ago, CryptoQuant Founder Ki Young Ju postulated that the price of BTC had reached its peak and that the bull cycle was over. However, following the impressive performance of the Bitcoin price in recent weeks, the on-chain analytics expert has walked back on their declaration.
Ju, however, mentioned that the Bitcoin market is still sluggish while absorbing new liquidity, even though the most recent price action is extremely bullish. Hence, the crypto founder hinted at waiting for a clearer signal before taking new market positions.
As of this writing, the flagship cryptocurrency is valued at just above $103,000, reflecting no significant movement in the past 24 hours.
