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 “29” to “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 layman terms, it indicates if people have sold their BTC 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 0.94 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 the bear market. For strong confirmation of trend reversal the metric should stay and oscillate above 1.
Is This The Beginning of the 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 start oscillating within a range after the fall in the bear market and increase 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 act as psychological support areas during bear markets.
After staying for more than 30 days below the realized price of 20, 312 USD , the price has just moved below it. For bull market confirmation, the market price should be above realized price.
MVRV ratio is equal to the market capital divided by realized capitalization of Bitcoin.
Realized capital, unlike market capitalization, does not use the current market price, but rather uses the prices of each Bitcoin when they last moved.
MVRV accounts both realized cap and market cap into account making certain values critical in making an investment decision.
Currently, the metric stands at 0.8 which means that the market is undervalued and buying BTC below 1 has produced outsized returns in past
Overall Market Performance
Dow Jones Industrial Average remained almost unchanged compared to last week. The 4-hourly trend for Dow Jones has broken out of the channel pattern. The next resistance is expected at 34,300 and next support is expected at 28,700 levels.
Gold Futures dipped marginally during the past week. The weekly trend for Gold is traversing within a descending channel pattern. The next resistance is expected at $1,820
Bitcoin remained neutral during the past week. The 2-hourly trend for BTC is moving within a descending triangle pattern. The next support for Bitcoin is expected at $14,700
Ethereum dropped over 6% against Bitcoin, in the week gone by. The weekly trend for ETH-BTC is traveling within the triangle pattern. The next resistance is expected at 0.085 and next support is expected at 0.065.
Highlights of the week:
Crypto funds saw their largest inflows in 14 weeks, with net inflows of $42 million in the seven days. Despite the market downturn, the inflows could indicate that investors see this price weakness as an opportunity.
Merchants who accept payments in Circle’s USDC stablecoin can now interact with Apple Pay. NFT marketplaces, crypto gaming, crypto exchanges, crypto wallets and cross-border remittance providers can help their business grow by making checkout easy with Apple Pay and Circle.
Bitcoin-holder El Salvador President Nayib Bukele and Justin Sun, the founder of the Tron cryptocurrency network and Grenada’s ambassador, have decided to accumulate bitcoin at a pace of 1 BTC per day.
Our Pick of the week: