This week the sentiment towards the cryptocurrency markets has not changed
significantly compared to last week’s index. The index currently stands at “21”.
Another data to evaluate the sentiment of the general public would be to look at Spent
Output Profit Ratio (SOPR). What is SOPR? In laymen terms, it indicates if people have
sold at a profit or if they sold at a loss. An SOPR value above 1 indicates that profit
booking dominated loss booking and below 1 indicates that loss booking dominated
profit booking. A value of 1 indicates that the coins were sold at their purchase price.
The Adjusted SOPR filters out transactions that are younger than 1 hour, thus,
clearing out noise from the metric.
The aSOPR for this week is at 0.9. During bear markets we have seen that the metric
oscillates below 1. As aSOPR reaches a value of 1, investors start selling their coins and
the metric falls below 1. The oscillation continues for an extended period of time
before final capitulation happens and the trend reverses.
Is there any demand for Crypto?
Balance on exchanges has reduced by 24% from its peak in March 2020. This signifies
more investors are transferring their coins from exchanges to their wallets. The
number of addresses with non-zero balance is at all-time high value of 42.5 million.
This can be attributed to high growth adoption of Bitcoin network.
Increase in number of unique addresses holding at least 10 BTC is one of the positive
signs that we see in this bear market.
What could play out?
MVRV ratio is equal to the market capital divided by realized capital of Bitcoin. Realized
capital unlike market capital does not use the current market price, but rather uses the
prices each Bitcoin when they last moved.
So, for example if the price of most of the Bitcoin when they last moved was $10,000
and the current price is $60,000. Then the MVRV ratio would stand at 6. This means
that the market is extremely heated and profit booking is likely. On the other hand, if
the of most of the Bitcoin when they last moved was near the market price, then the
CMP can be considered as the bottom.
MVRV ratio has not changed much compared to last week. Currently the ratio stands
at 0.94. The metric is oscillating below 1 which is the general trend in most of the bear
Stablecoin Supply Ratio (SSR) is the ratio of market cap of BTC divided by the market
cap of all stablecoins.
High SSR value indicates supply of stablecoins is low compared to the market cap
of BTC. This means low buying potential and possible price drop.
Low SSR value indicates supply of stablecoins is more compared to the market cap
of BTC. This means high buying potential and possible price rise.
Currently, SSR is at all-time low indicating high buying potential.
Overall Market Performance
Dow Jones Industrial Average remained completely neutral in the last week. The daily
chart for Dow Jones continues to move in a megaphone down pattern. The next
resistance is expected at 32,800 and next support is expected at 28,900.
Gold Futures closed in red for the 5th consecutive week dropping 2.2% in the last
week. The daily trend for Gold is traversing within a descending channel pattern. An
immediate support is expected at $1,670
Bitcoin remained fairly flat during the last week. The daily trend for BTC has broken out
of the channel pattern. The next resistance is expected at $32.3K and key support is
expected at $14K.
Ethereum against BTC surged by 15% in the last week. The weekly trend for ETH-BTC
continues to traverse within an ascending triangle pattern. The next resistance is
expected at 0.076 and an immediate support is expected at 0.046
Highlights of the week
Robinhood users can now withdraw crypto from their
platform. The first exchange to offer withdrawal service
amidst the bear market.
Revoto to sell NFTs that grant a lifetime subscription to
Netflix and Spotify. Once users acquire the NFT, Revuto will
provide the user with a digital debit card to pay for their
Netflix or Spotify subscriptions.
Disney chooses Polygon for entering Metaverse. Ethereum
scaling solution Polygon has been selected to participate in
Disney’s Accelerator Program to further Polygon’s
development of Web3 experiences.
Our Pick of the Week
We expect a gain of 15% from the Buy Price of 0.1763 USDT and
outperform BTC in the coming week.