What is the general sentiment for Crypto?
The sentiment towards the cryptocurrency market has changed from extreme fear to fear. Compared to last week’s, the Fear & Greed Index has changed significantly and currently stands at “34”.
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.
Are We Out Of The Bear 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. Even though, we have seen more than 5% increase in the price of Bitcoin but 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.
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.
Currently, the realized price , 21,105 USD , is below the current price and the level $21,105 is acting as psychological resistance area.
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 0.97 which means that market is holding 3% loss. This means the market is still undervalued and we might see trend reversal when the metric starts oscillating above 1.
Overall Market Performance
Dow Jones Industrial Average gained by nearly 6% in the previous week. The weekly trend for Dow Jones has formed a megaphone down pattern. The next resistance is expected at 34,300 and next support is expected at 28,700 levels.
Gold Futures remained fairly neutral 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 closed 5.4% higher during the past week. The weekly trend for BTC is traversing within a rectangle pattern. The next resistance is expected at $25.1K and key support is expected at $17.6K
Ethereum grew by over 10% against Bitcoin, in the week gone by. The weekly trend for ETH-BTC is moving within an ascending triangle pattern, on a 5-year consolidation. The next resistance is expected at 0.085 and next support is expected at 0.065.
Highlights of the week
Japanese crypto exchange Coincheck is planning to complete its listing on Nasdaq via a merger with special purpose acquisition company (SPAC) Thunder Bridge Capital Partners IV on July 2, 2023 and was valued at $1.25 billion in March’22.
Blockchain Node Engine will be a fully managed node-hosting service that can minimize the need for node operations.
The 2022 FIFA World Cup is less than a month away. In the past seven days, fan tokens of the Peruvian national football team (FPFT), Spain’s national team (SNFT) and Brazil’s national team (BFT) have rallied 29%, 17% and 12%, respectively.
Our Pick of the Week
We expect a gain of 10% from the Buy Price of 7.74 USDT and outperform BTC in the coming week.