This week the sentiment towards the cryptocurrency markets has further deteriorated.
The fear and greed index compared to last week has decreased by 6 points and
currently stands at “6”.
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.
aSOPR had broken the value of 1 and has continued its downward trend. This indicates
that Bitcoins are still being sold at a loss. This is a classic panic seller behavior and it is
being quietly sold to the accumulators. Eventually the panic sellers will run out of BTC
to sell or will calm down.
Is there any demand for Crypto?
Number of addresses with non-zero balance has neither increased nor decreased
compared to last week but number of addresses with balance greater than 100 BTC
has decreased. This means there has been reshuffling of coins within the investors and
no new investor has entered the market.
What could play out?
Realized price is the average price of all circulating coins. It acts as the psychological
support during bear markets and prices below this level usually marks the end phase
of bear market. Historically, during bear markets we have seen prices hovering below
this level for months before moving upwards.
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 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.
The current realized price is below the market price and MVRV ratio has fallen to
0.89 This indicates that the Crypto Market is in the last phase of the bear market.
Overall Market Performance
Dow Jones Industrial Average fell by another 5% in the previous week. The daily chart
for Dow Jones has broken below the descending channel pattern. The next support is
expected at 28,900.
Gold Futures dropped by nearly 2% ending the week below $1,850. The 12-hourly
trend for Gold is traversing within a triangle pattern making higher lows. The next
resistance for Gold Futures is expected at $2,000.
Bitcoin had a horrendous week dropping by 30% and falling below $18,000 for the first
time in over 1.5 years. The monthly trend for BTC is moving within an ascending
channel pattern, close to the support level. The next support is expected at $14,000.
Ethereum against BTC closed in red for the 6th consecutive week. The weekly trend for
ETH against BTC has broken below the ascending triangle pattern. An immediate
support is expected at 0.046
Highlights of the week
The CEO and co-founder Brian Armstrong had announced
the decision to lay off 18% of employees globally to ensure
that they stay healthy during this economic downturn
Elon Musk is facing a lawsuit that alleges that he, as well as
his companies, Tesla and SpaceX, were engaged in a crypto
pyramid scheme of Dogecoin cryptocurrency.
Celsius lets customers know that they will keep your crypto
if they go bankrupt. We hope this isn’t the case because a lot
of people would lose their life savings but please don’t overleverage
your income and don’t store your crypto on
Lacoste has made a dive into the non-fungible token (NFT)
ecosystem as it has launched its own collection dubbed
Underwater (UNDW3). The collection consists of 11,212
NFTs, priced at 0.08 Ethereum per piece.
Our Pick of the Week
Origin Protocol (OGN)
We expect a gain of 15% from the Buy Price of 0.2397 USDT and
outperform BTC in the coming week.