This week the sentiment towards the cryptocurrency markets were extremely grim on
account of the Terra Luna fiasco and record inflation numbers. The Fear & Greed index
has reached a new low of “9″
Evaluating the below fear and greed chart, it seems like the “Buy the fear” and “Sell the
greed” have worked in the past. We are now currently sitting at the extreme bottom of
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 SOPR this week as shown below has finally broken below the value of 1. This
indicates that Bitcoins are being sold at a loss. This is a classic panic seller behavior
and the people sitting in profit are waiting for the buying to begin to sell at a higher
Demand for Cryptocurrency
As mentioned in the prior report, the small and concerning uptick has turned out to
cause a major market correction. It is our assumption, that this was the doings of the
Luna foundation accompanied by the panic sellers. Things however the LUNA event
has stabilized and it is likely that a BTC leaving exchanges is likely to resume. The
numbers have also started to reverse.
The overall buying behavior seems to be strong, as the number of addresses with
atleast 1 BTC is still on the uptrend.
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.
We can connect the dots with the prior chart on Bitcoins leaving exchanges with the
above data point and can assume that the Luna’s BTC reserves are responsible for the
downtrend on this number. As the number of BTC addresses with at least 1 BTC has
been climbing higher and higher.
Overall Market Performance
Dow Jones Industrial Average continued to falter for the 7th week in a row dropping
over 2% in the last week. The daily chart for Dow Jones is traversing within a
descending channel pattern. The next support is expected at 31,000.
Gold Futures fell by 4% over the past week to drop below $1,800. The weekly trend is
on the verge of breaking below the triangle pattern. The next support for Gold
Futures is expected at $1,675.
Bitcoin plunged by nearly 9% during the last week to drop below $27K amidst
weakening market sentiment. The daily trend for BTC has broken below the triangle
pattern. The next resistance for BTC is expected at $40,000 and immediate support
is expected at $24,000.
Ethereum against Bitcoin dropped by 8% over the week. The daily trend for ETH
against BTC has formed a channel pattern. The next resistance is expected at 0.077
and next support is expected at 0.064
Highlights of the week
Our Pick of the Week
We expect a gain of 10% from the Buy Price of 0.73 USDT and
outperform BTC in the coming week.