The crypto market sentiment continued to remain grim throughout the week. The fear
and greed index is still in the “extreme fear” zone with a score of 12.
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.
The Adjusted SOPR filters out transactions that are younger than 1 hour, thus,
clearing out noise from the metric.
The graph above shows that the SOPR has remained less than 1 since the start of this
month, an indication that investors are continuing to sell their BTC at a loss. A further
decrease in price can lead to capitulation
Where are we in the cycle?
A] Percent Supply in Profit
The metric measures percentage of circulating supply in profit, i.e., the percentage of
existing coins whose price at the time of purchase is lower than the current price.
When the percent supply in profit graph is
Applying the 50-day Moving Average, we observe that currently 60% of the supply is in
profit. Historical data suggests that further decrease in price can lead to the metric
falling below 50%. This can be considered as market bottom and a good entry point.
B] Net Unrealized Profit/Loss (NUPL)
Unrealized profit or loss of a Bitcoin is calculated by taking the difference between
current market price and price at which the coin was last moved. Net unrealized
profit/loss is the difference between Relative Unrealized Profit and Relative Unrealized
Currently, the NUPL is less than 0.25 which classifies that the market is in a Hope-Fear
zone. From the previous cycles it can be concluded that, price further down from this
point can rapidly lead the market to capitulation zone. Capitulation zone can be
considered as bottom of bear market.
Is the Smart money buying?
We will consider wallet addresses with more than 1000 Bitcoin as institutional
investors who are closely monitoring the asset class. The last week saw a decline of
about 0.75% in the no. of addresses with more than 1000 BTC, an indication that
institutional investors have sold their Bitcoin holdings in the last week.
Overall Market Performance
Dow Jones Industrial Average fell by nearly 5% in the last week. The daily chart for Dow
Jones continues to traverse within a descending channel pattern. The next resistance is
expected at 35,500 and an immediate support is expected at 30,600.
Gold Futures gained almost 1.5% in the past week. The weekly trend for Gold is
moving within an ascending triangle pattern making higher lows. The next resistance
for Gold Futures is expected at $2,000.
Bitcoin closed lower in the past week. The 4-hourly trend for BTC continues to traverse
within an ascending channel pattern. The next resistance for BTC is expected at $40,000
and an immediate support is expected at $26,700.
Ethereum against BTC dropped significantly (nearly 10%) over the week. The daily trend
for ETH against BTC has broken below the descending channel pattern. An immediate
support is expected at 0.038
Highlights of the week
The new payment system will allow Mastercard holders to
directly purchase NFTs from a digital assets marketplace.
Whereas earlier NFT buyers would first have to purchase
crypto to complete the transaction.
An employee of Terraform Labs has stolen 80 Bitcoin worth
nearly $2.39 million during the Terra’s UST and LUNA
the collapse in May.
VeChain will become the UFC’s first-ever Official Layer 1
Blockchain Partner, giving the blockchain Foundation
extraordinary access to key UFC assets such as live events,
broadcast features, and in-arena promotion
The UK Finance Ministry announced that the country will
start live testing blockchain technology for traditional market
activities such as trading and settlement of stocks and bonds
Our Pick of the Week
We expect a gain of 10% from the Buy Price of 0.942 USDT and
outperform BTC in the coming week.