When the increase in bitcoin prices resumes? We understand the help of onchain
Cryptocurrencies are unique in that it is applicable for them onchain analysis, impossible for traditional financial instruments. Generally accessible blockchain-data allow you to learn a lot about the activity, moods and motives of market participants, identify patterns and predict the most likely scenarios of price movement.
FORKLOG collected and analyzed the most interesting and relevant hectors and found out what to expect from the price of bitcoin in a brief and medium term.
- Many onchain metrics give positive signals indicating the likely resumption of bitcoin rally.
- Large investors actively accumulate bitcoins on their wallets. Balances of centralized exchanges are reduced.
- Some indicators indicate that the bottom of the market cycle is still far away, so you should not exclude the fall of prices below $ 30,000.
Bitcoin kitov wallets. In early July, owners of bitcoin addresses with balances from 100 BTC to 10,000 BTC increased their positions by 60,000 BTC-up to 9.12 million BTC.
As can be seen on the graph, before that, “whale balance” grew in tandem with a price. The trend lasted since last year’s spring. February 8, the indicator reached the highest point of 4.542 million BTC. Then followed a sharp decline in balance sheet, stopping the price rally.
“In the following months, whales became sellers who dispel the bull trend. And by early May, their stocks of bitcoins fell by 8% – up to 4.17 million BTC, ”Years shared observations.
According to the expert, the last surge in the balance of large players may indicate the achievement of the bottom of the bottom.
Similar patterns were discovered by the William Clemente III onchain analyst. Bull divergence is visible on the Bitcoin Liquid Supply Ratio indicator.
The speculative activity of short -term investors inherent in the overheated market is reduced. This is evidenced by the dynamics Hodl waves.
“Historically, the surrender of miners is a good indicator of the bottom of the market,” the researcher emphasized.
Based on the data indicator NVT Price, The fundamentally sound price of bitcoin is near $ 48,000. Therefore, the first cryptocurrency at the time of writing (7.07.2021) underestimated by the market.
“It should be emphasized that a simple achievement of this area does not mean that bitcoin certainly reached the bottom. This is just a sign of BTC underestimation, ”the author of the article explained.
Blue blocks are highlighted when the indicator has already plunged into the green zone, but the price has not yet reached the bottom. Red block noted a drop in bitcoin prices below $ 4,000 in March 2020.
“This is the only case in history when the BTC has reached the bottom when visiting the green zone indicator Puell Multiple,” the Rekt Capital blog says.
After that, the indicator again visited the resold range (yellow block), which marked the consolidation of the price and subsequent restoration.
We can conclude that usually the first achievement of the green zone does not coincide with the bottom of the price of bitcoin. A signal confirming the lower extremum of the market cycle can be a second visit to the indicated indicator. After that, you should not wait for a V-shaped price turn-restoration is preceded by a consolidation period.
In the following graph, the blue trend line connects the lower values of the Puell Multiple indicator, each of which is slightly higher than the previous one. Since the red line has not even touched the blue, not to mention its retest, the bottom of the price of bitcoin has not yet been achieved. It is also noteworthy that the correction was not preceded by the redness allocated by the red zone.
In this context, it will be interesting to observe whether the range of $ 29,000- $ 39,000 will be possible against the background of reaching the Puell Multiple trend line. If so, then, according to the author of the Rekt Capital blog, this will be a confirmation of the “price stability of bitcoin”.
Indicator values MVRV Z-Score approach the mark 1, in which bitcoin is neither overestimated or underestimated by the market.
Overwhelming area, according to MVRV Z-Score, was achieved at the end of February this year. However, to the optimal deep resale zone for buyers, as in March 2020, still far away.
Metric Market Capitalization to Realized Capitalization (MVRV, the ratio of market capitalization to realized), developed by researchers Murad Mahmudov and David Pewell. They first tried this instrument in 2018 to identify overvaluation and underestimation of assets.
Cryptoanalyst AWE & Wonder has improved MVRV, adapting an indicator for more reliable trade solutions. The modified version of the tool is called MVRV Z-Score.
The next indicator deserves – Reserve Risk.
“It is used to assess the confidence of long -term holders regarding the price of a native coin at a certain point in time. When the confidence is high and the price is low, the ratio of risk-disposal becomes attractive (Reserve Risk indicator at low-levels). When the confidence is low and the price is high, this ratio is unattractive (reserve risk at high -levels), ”the description of the tool on the Glassnode portal says.
The graph below shows that Reserv Risk values have not yet reached the optimal green zone for investors.
Sopr. This indicator can be used to determine the periods when many assets holders fix profit or sell digital gold at a loss. During these periods, bull and bear mood prevails, respectively.
The indicator is the ratio between the price of bitcoin during a waste UTXO and the market value of the https://gagarin.news/news/dubai-sheikhs-open-a-representative-office-in-the-sandbox-metaverse/ latter at the time of the creation of the exit. This, in fact, is the ratio of sale price to the purchase price.
The chart below shows the dynamics of the ASOPR indicator, ignoring outputs with a life cycle of less than an hour. Since the metric is quite volatile, its values are smoothed out with a 7-day sliding average.
On the graph above green, optimal periods for the long -term purchase of digital gold are highlighted. It:
- October 2011 – January 2012;
- January 2015 – November 2015;
- November 2018 – May 2019;
- March 2020.
This year, the indicator did not cross the red line of extreme overwhelming, as in December 2017. Thus, the deep correction of 2021 was not preceded by the peak of the bull cycle of the market.
Does not indicate the bottom of the market and Realized Hodl Ratio. This metric is based on hodl waves.
The red line of the indicator is located in the “Optimism/Denial” zone and has not even reached the “Hope/Fear” range, not to mention the “surrender”. The latter was relevant at the turn of 2018-2019 and in March 2020.
Negative and dual signals
In June The volume of trading On cryptocurrency exchanges, it was approximately halved – by 52%. The indicator has reached a minimum in five months of $ 1.2 trillion.
On the one hand, a decrease in exchange revolutions is a clear sign of attenuation of a speculative hype. On the other hand, this may indicate the achievement of the bottom of the bottom. During this period, small market participants are demotivated, and large players, on the contrary, accumulate positions, being convinced that current prices are fundamentally low.
Another such dual signal is low, and sometimes not negative Financing rates for borrowed funds for marginal trade.
The graph below shows that the period of supernarial and negative rates lasts from the second half of May.
“Holders of short positions are still trading in the markets of unlimited swaps with a high degree of confidence,” commented on the situation by Arcane Research analysts. – Open interest in the futures market also invariably holds near $ 11.5 billion. This presumably indicates a decrease in appetite among market participants “.
In this, it would seem, obviously a bear signal is some positive. According to Decentrader experts, such a protracted situation with the rates is fraught with a short schedule . However, do not forget that Short-Square often turns into a continuation of the fall due to the predominance of demand over demand with unchanged fundamental factors.
CEO Kai Young Ju tweeted in June that the bear market was “confirmed because whales are sending their bitcoins to exchanges,” and this is fraught with pressure from the pressure.
I Hate to Say This, But It Seems Like The $ BTC Bear Market Confirmed.
“Stop trading, be patient and wait for the next volatility,” Ju advised.
In a conversation with Decrypt, he noted that the market is historically bear, when the tributaries of “whales” prevail. However, he did not rule out that what is happening with the price is a protracted series of corrections.
Analyst Alex Krueger agreed with Ju’s opinion. He emphasized that the market is “definitely bearish”.
“The only positive point on the horizon is that everyone is extremely honey,” he said.
Kruger added that “it could have been worse” and that there is no single definition of a bear market.
What does TEHANALISIS say?
The schedule below shows that from the third decade of May the price is clamped in the side of the range of $ 29,000- $ 31,000 and marks in the region of $ 41,000.
A positive factor can be called the growing values of the RSI indicator. In May, he pointed to deep resale of the market, having failed below the 30th mark for the first time since March 2020.
On the other hand, the above range is the figure of continuation of the trend rectangle. Therefore, the probability of continuing the fall after the Flat is high.
The @filbfilb trader sees in the ongoing Vaikoff accumulation phase, preceding the ascending trend.
The scheme attached to tweet shows that before the breakdown of the upper boundary of the range should be followed by its retest and updating the local minimum – a bear trap Spring.
Many indicators give positive signals, some – neutral. A few negative signals can be indicated rather not to the bear market, but to the resale of bitcoin, due to mainly the actions of short -term investors.
The opinions of well-known techanalists vary radically-everyone in their own way interprets the current situation. For some, what is happening on the market is a temporary correction and an excellent opportunity to buy cheaper, for others – an obvious turn of trend and a new bear market cycle.
The main drivers of the market are long -term investors who build up positions. Accumulation at the addresses of whales occurs against the background of the renewal of the activity of the institutions, which for the first time in a long time have increased investments in crypto funds. These are positive signals portending the likely ascending trend.
Be that as it may, the degree of uncertainty is high. This means that it is better for investors to act carefully, not excluding the likelihood of a failure of the level of $ 30,000 and the movement to the peak of the past bull cycle at $ 20,000.
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