What is the general sentiment for Crypto?
The sentiment towards the cryptocurrency market is in the fear zone. Compared to last week’s, the Fear & Greed Index has changed from “34” to “40”.
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. Adjusted SOPR filters out transactions that are younger than 1 hour, thus, clearing out noise from the metric.
aSOPR for this week stands at 0.99 which means the coins on average are being sold near their purchase price. Generally, we see that the metric value of 1 acts as resistance during bear market. For strong confirmation of trend reversal the metric should stay and oscillate above 1.
Is This The Beginning of Bull Market?
The number of active addresses is directly proportional to the number of active users. It is important to note that the number of active addresses doesn’t give the exact number of active users as a user might have more than one address.
During a bull market, the number of active addresses increases tremendously and a sharp fall is experienced as prices begin to fall showing weaker hands leaving the market. Historically, we have seen the metric startes oscillating within a range after the fall in the bear market and increases sharply as the market prepares to move out of the bear phase. The number of active addresses is still moving within a range (sideways movement) and doesn’t show the growth as seen during the start of the bull market. Thus, the metric doesn’t confirm start of the bull market.
Realized price is defined as the average cost of acquisition based on every coin moved on-chain. In all the previous bear markets we see that the price trades below the realized price which indicates on average the coins held during this period have higher cost of acquisition than the current market price. Realized prices acts as psychological supports areas during bear market.
After staying for more than 30 days below the realized price , 21,107 USD , the price has just moved above it. For bull market confirmation, the market price should be above realized price.
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 of 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.
Currently, the metric stands at 1 which means that market is neither in profit nor at loss. For confirmation of trend reversal the metric should oscillate above 1.
Overall Market Performance
Dow Jones Industrial Average dropped marginally (1.4%) in the last week. The weekly trend for Dow Jones continues to traverse within a megaphone down pattern, bouncing-off the top trendline. The next resistance is expected at 34,300 and next support is expected at 28,700 levels.
Gold Futures gained nearly 2% in the last week. The weekly trend for Gold is traversing within a descending channel pattern. The next support is expected at $1,620
Bitcoin remained fairly neutral during the past week. The weekly trend for BTC is moving within an ascending channel pattern, nearing the bottom trendline. The next resistance is expected at $25.1K and key support is expected at $17.6K
Ethereum dropped nearly 3% against Bitcoin, in the week gone by. The daily trend for ETH-BTC is forming a cup and handle pattern. The next resistance is expected at 0.085 and next support is expected at 0.065.
Highlights of the week
Singapore’s central bank has approved an in-principle license for a local unit of Hong Kong virtual asset manager Hashkey Group. The license will allow the company to conduct fund management services in Singapore.
India’s crypto industry has formed a new advocacy body almost four months after the previous one was disbanded under cloudy circumstances. The body will be called Bharat Web3 Association (BWA) and will work with the Indian government for making India a global leader in the web 3.0 industry.
In a poll, nearly 40% of voters under the age of 45 reported being more interested in crypto in the current economic climate. Over half of voters surveyed who did not own crypto were waiting until the economy improves before investing.
Our Pick of the Week
We expect a gain of 10% from the Buy Price of 0.1103 USDT and outperform BTC in the coming week.