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 “21” to “28”.
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 0.97 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 End of the Bear Market?
When coins are sent between wallets, the transaction has:
- a USD value
- plus, it also destroys a time value in terms of how long the original investor held their coins
That value is Coin Days Destroyed (CDD).
CVDD tracks the cumulative sum of this value-time destruction as coins move from old hands into new hands as a ratio of the market age. It is then multiplied by 6 million, which is a somewhat arbitrary number as it is not linked to any relevant Bitcoin data.
The result is that it has historically correctly forecasted the major lows of Bitcoin’s price with good accuracy. The Bitcoin price may have reached the bottom as per the above chart
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.
The current price of Bitcoin is trading below the realized price of Bitcoin of 20, 241 USD. For bull market confirmation, the market price of Bitcoin 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.
- Values over ‘3.7’: Possible Market Top
If the values go above 3.7, it could be reasonable to sell the position off - Values under ‘1’: Possible Market Bottom
If the values go under 1, it is time for taking a gradual long position.
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
Dow Jones Industrial Average gained by nearly 2% in the last week. The daily trend for Dow Jones has formed a double bottom pattern and we can expect the momentum to continue. The next resistance is expected at 34,300 and next support is expected at 28,700 levels.
Gold
Gold Futures remained totally flat during the past week. The weekly trend for Gold continues to traverse within a descending channel pattern. The next resistance is expected at $1,820
Bitcoin
Bitcoin jumped up marginally during the past week. The 4-hourly trend for BTC is moving within a descending triangle pattern. The next support for Bitcoin is expected at $14,700
ETHEREUM
Ethereum gained nearly 5% against Bitcoin, in the week gone by. The weekly trend for ETH-BTC has 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
Starting in the spring of 2023, the Bank of Japan will work with private banks and other organizations to identify any problems with deposits and withdrawals and check that a central bank digital currency (CBDC) can operate during natural disasters and in areas without internet access.
Sales for the Saudi Arabia-themed non-fungible token (NFT) collection called “The Saudis” increased 387% on Tuesday following the country’s surprise 2-1 win against Argentina, which is considered one of the best soccer teams in the world.
Seychelles-based exchange Bitget has started operations in Brazil and will allow users to make crypto purchases in Brazil.
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