Crypto Market Dominance
What is the general sentiment for Crypto?
The sentiment towards the cryptocurrency market is in the fear zone and compared to last week’s, the Fear & Greed Index has not changed significantly and currently stands at “26”.
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.
The aSOPR for this week currently stands at 0.98 which means the coins on average are being sold at loss. 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. The current gain in price of Bitcoin hasn’t moved the metric exponentially. It is still moving sideways and thus, the metric doesn’t confirm trend reversal.
Exchange reserve is one of the important metrics to determine the potential number of coins with a high probability of getting spent in the market.
Exchange reserve increases: Liquid supply increases, selling pressure increases
Exchange reserve decreases: Illiquid supply increases, selling pressure decreases
C ompared to last week, the metric has slightly increased and the recent price gain of Bitcoin might increase the probability of investors booking profit.
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 acts as resistance in the bear market. If the metric stays above 1 and oscillates above it, we might see trend reversal.
Stablecoin Supply Ratio (SSR) is the ratio of market cap of BTC divided by the market cap of all stablecoins.
- Low SSR value indicates high Stablecoin Supply compared to that of BTC market cap indicating potential buying pressure and possible price rise.
- High SSR value indicates low Stablecoin supply compared to the market cap of BTC indicating potential selling pressure and possible price fall.
Currently, SSR is at its bottom which means potential buying area of Bitcoins.
Overall Market Performance
Dow Jones
Dow Jones Industrial Average recovered by nearly 3% in the last week. The 4-hourly trend for Dow Jones is traversing within a channel pattern, bouncing of the bottom trendline. The next support is expected at 29,600 level and next resistance is expected at 34,300.
Gold
Gold Futures improved marginally over the previous week. The weely trend for Gold is moving withing an ascending channel pattern. The next resistance for Gold is expected at $1,840 and next support is expected at $1,680
Bitcoin
Bitcoin gained over 9% over the past week, closing positive for the 2nd week in succession. The weekly trend for BTC is traversing within a descending triangle pattern. The next resistance is expected at $32.3K and key support is expected at $17.9K
ETHEREUM
Ethereum gained over 3% against Bitcoin during the last week as Bitcoin Dominance index continued to weaken. The daily trend for ETH-BTC has broken below the ascending channel pattern. The next resistance is expected at 0.088 and next support is expected at 0.076.
Highlights of the week
MetaWeb is focused on supporting developers and
researchers building the future of Web3. MetaWeb invested
in Orderly, Niche, CornerstoneDAO, Sender Wallet, Kino, and
Play3.
Swiss digital asset banking platform SEBA Bank said that it
has launched an Ethereum staking service for institutions
that want to earn yields from staking on the Ethereum
network. According to the firm, the move is a response to
the growing institutional demand for decentralized finance
(DeFi) services.
The Russian central bank has been rethinking the approach
to regulating crypto and agreed with the finance ministry to
legalize crypto for cross-border payments as Russians rely on
foreign platforms to open a crypto wallet, the local news
agency TASS.
Our Pick of the Week
Ethereum (ETH)
We expect a gain of 10% from the Buy Price of 1,762.27 USDT and
outperform BTC in the coming week