Market Outlook - 25/07/2021

 Introduction

In this blog post we are going to talk again about Bitcoin microscopic and macroscopic charts. As the probability for high Bitcoin market volatility increases, we will analyse the current market situation using on-chain metrics and charts. Things started to look better already, but remember the trend is your friend and trade do not date.

I would also like to inform you that we started our new channel, so please feel free to pay us a visit:

Microscopic Outlook

As we can see in the chart below the Bitcoin dominance is increasing and retesting previous resitance line. The most inetersting patterns can be seen by the RSI trend reversal pattern. It looks like smart money are entering the market.

 

 

Note: Even though the volume remains low, we can clearly see that Bitcoin is slowly reclaiming dominance.

 

Below we can see the 3m Bitcoin mempool chart:

 

 

Note: Volatility is not here there compared to May, but we can see spikes. So Bitcoin constellation is still on the play.

 

On-chain activity remains extremely muted with mempools clearing, and transaction volumes continuing to fall. As the mempool empties, the average block size has fallen by 15% to 20%, down to 1.103M bytes. [1]

 

 

Note:  This indicates that demand for Bitcoin block-space and on-chain settlement is low, mined blocks are not full, and the utilization of the network is relatively low.

 

Below we can see the addresses holding more than 10K of BTC (two week chart):

 

Note: This chart information combined with the low volatility shows that the Bitcoin price is going to consolidate, for at least one more week. This chart also shows us that because most of the smart money buys through OTC, and because the addresses holding more than 10k increases and then drops, market manipulators want to slowly increase the Bitcoin price. This is also called the accumulation phase.

Below we can see the Bitcoin annual exchange reserves:

 

Note: In this chart we can see something very interesting. The Bitcoin exchange reserves is increased.

Below we can see the exchange net flows of BTC (two week chart):

 

Note: This charts confirms previous conclusion, which are a) BTC hit bottom, b) accumulation started. We can see the pattern designates small increments of the smart money in the BTC cap.

Macroscopic Outlook

 

We do not have nuch to say about the Bitcoin macros. The most important news about Bitcoin is that high net-worth individuals are buying in:

 

Cathy Woods bought Bitcoin recently (this verifies accumulation started):

 

Rothchilds bought Bitcoin recently (this verifies accumulation started):

 

Bitcoin ETF recently came up (this verifies accumulation started):

Conclusion

 

The following conclusions are confirmed:

• Net Entity growth remains positive
• Exchanges have seen net outflows after an extended period of inflows since mid-May.
• Smart Money started pouring in
• It looks like accumulation started.
  

References:

 

• insights.glassnode.com [1]

Market Outlook - 27/05/2021

 Introduction 

In this blog post we will see what is happening on the BTC charts and end up with some conclusions about further price action. It seems that BTC is going to consolidate for the next couple of weeks. There is an accumulation zone created by the whales between 35k and 42k. Dont forget that Elon bought at 35k and therefore it is not going to go below that (whales never lose money). 

Elon's tweets that were partially responsible for the dump range from claims of negative externalities from energy consumption,  to claims that 10x faster and larger blocks on Dogecoin are a viable alternative. Unfortunately, this has lead to widespread confusion in markets, although for many Bitcoin HODLers, this is just another day in the office.

Below we can see the percentage in entities in profit from March 2020:

Note: The states say it all.

BTC Microscopic Outlook

Below we can see the 4hr BTC chart:

Note:  ABove we can see that BTC is rejecting mini head and shoulder reversal pattern. 

Below we can see the same chart with some resistance and support lines:

Note: Above we can see that there is a drop on the volume, which can be an indecator that BTC is going to continue consolidating. Also in a MACD we get a potential reversal, but in RSI is not clear.

Below we can see the 1d BTC chart:

Note: Above we can see that on the daily chart we are still bearish.

Below we can see the 1d BTC chart:

Note: We can see now that BTC a moving range of 12% (meaning consolidating in -+12% range, were we can trade). Also is below the 21 EMA , which seems to act as some king of strong resistance. If BTC breaks the 21 EMA thet we would expect a significant upward movement. 

BTC Macroscopic Outlook

Below we can see that the BTC NUPL is reset for good and that the BTC price and reserve is also droping together, which make it easy to understand that the price drop was purely manipulated.

Below we can see the NUPL from Glassnode:

Note: As we can see there has been a very good reset in the BTC NUPL chart. What does that mean is that the BTC bull run broke into 2x mini Bull runs and a mini Bear market, which will suppress the annual global top.

Below we can see the aSOPR from Glassnode:

Note: Above we can see that 35k might actually be the global (annual) bottom. We can also see from the chart that this deep could not be predicted by the aSOPR at all (aSOPR usually gives you a notification from 7 to 2 days earlier). BTC DIP WAS COMPLETELY UNNATURAL, THE BTC FUNDAMENTALS DID NOT CHANGE AT ALL AND THE DUMP IS NOT JUSTIFIED. 

Below we can see the BTC reserves:

Note: Again the macros did not change at all.

Below we can see the BTC netflow:

Note: Above we can see that the inflow increased dramatically to push the price lower.

Conclusion

We hit the bottom:

Note: We can see her the volume level is similar.

References:

• insights glassnode [1]
  

Market Outlook - 21/04/2021

 Introduction 

In this blog post we are going to analysis ETH short term (grab the money and run), and what trades to open on ETH [1]. ETH reached all time high (ATH) at 2500 something, this price could be predicted with fb entrancement.

 

See below:

 

Note: This chart shows the Fibonacci retrenchment hitting the psychological resistance close to  2500 dollars. ETH also has a significant de-coupling after January 2021 (about 9%), due to the fees and some other issues. It seems that ETH is going to retest very soon the 2500 dollar resistance pretty soon.

ETH TA

Below we can see that ETH formed a reverse double bottom:

Note: Set your limit sell order to 2300 something, as 2500 is a psychological resistance. A 10x on 2370 is safe enough. ETH seems to create a pennant after the 2279 dollar resistance. Also the latest 4hr resistance can act as a support.

ETH every time it is testing the EMA ribbon bonces back up: 

Note: ETH today is moving above the EMA ribbon and has successfully completed a ribbon bonce. 

UPDATE (22/04/2021)

We can see now that on the 1hr chart ETH created a channel:

And on 1day chart the ETH FBR is targeting the 4159dollars: 

References:

• www.newsbtc.com  [1] 

Market Outlook - 14/04/2021

 Introduction 

This article is going to focus on a few coins and run a basic analysis for opening trades. Below I am listing some interesting coins that look promising for short term trading.

Bitcoin

Below we can see the 4hr Tradingview chart:

Note:  BTC seems is going to consolidate the next couple of weeks.

Below we can see the day Tradingview chart:

Note: We can see that BTC volume drops, MACD and RSI show a minor trend cool down. My speculation is that BTC will go side ways for the next couple of weeks, unless something big happens.

Below we can see the Glassnode BTC Exchange 2 week NETflow:

Note: The inflow seem to to increase, which conform a BTC consolidation. 

Below we can see the Glassnode BTC Exchange 2 week reserve:

Note: It looks like the downtrend will continue, which is good as a macroscopic indecator.

Zilliqua (ZIL)

Below we can see the 4hr Tradingview chart:

Note: Volume reduced , RSI and MACD shows a reversal.

Below we can see the day Tradingview chart:

Note: Volume reduced , RSI and MACD shows a reversal. Strong support at 0.14677 dollars.

Uniswap (UNI)

Below we can see the 4hr Tradingview chart:

Note: It looks like Uniswap is preparing to make a significant move in the next days. Uniswap is forming a pennant! and volume pattern supports that.

Below we can see clearly the pattern:

Note:   In technical analysis, a pennant is a type of continuation pattern formed when there is a large movement in a token, known as the flagpole, followed by a consolidation period with converging trend lines—the pennant—followed by a breakout movement in the same direction as the initial large movement, which represents the second half of the flagpole.

Below we can see the day Tradingview chart:

Note: This chart confirms the imminent upwards move. This is a even now a good entry point. 

Below we can see the Glassnode Uniswap Exchange 2 week NETflow:

Note: It seems that Uniswap exchanges outflow are about to increase.

Below we can see the Glassnode Uniswap Exchange 2 week reserve:

Note: It seems that Uniswap exchanges balance is dropping  and this info combined with the Unipig (Uniswap v3 upgrade) update is going to give a boost to the coin. This chart confirms the upwards move for UNI too!!

Binance Coin (BNB)

Below we can see the day Tradingview chart:

Note: This chart demonstrates that BNB is now in a price discovery move after hitting ATH. Just bare in mind that BNB has a 90% plus correlation with BTC, even though it is a utility coin and a fork of ETH  Binance proved that can and will deliver (compared to ETH). Also this combined with the staking options provided and the burning features makes is a good candidate for hitting 1000 dollars by end of year if not more!!! Bare in mind that BNB Market Cap hit $88,350,515,767 and 100b is a psychological level..... 

Below we can see the Glassnode BNB Exchange 2 week NETflow:

Note: The exchange netflow shows that it might be an inflow on the immediate future , if this continues will affect negatively the price. 

Below we can see the Glassnode BNB Exchange 1 month reserve:

Note: This chart shows that the BNB reserves for the last month increased and this might actually have an negative impact on the price, that might cause BNB to consolidate.

LoopringCoin (LRC)

Below we can see the day Tradingview chart:

Note: LRC looks good baby. LRC is using zkRollup and is an Exchange and Payment Protocol. Loopring protocol can settle up to 2,025 trades per second while guaranteeing the same level of security as the underlying Ethereum blockchain. This is made possible by using a construction called zkRollup, which aggregates and executes transactions off-chain, in a provably correct manner. This is also a layer 2 solution that competes with ETH FYI. The longer the ETH waits for the upgrades, the longer LRC is going to boost. Both oscillators show an uptrend. 

Below we can see the Glassnode Loopring Exchange 2w Netflow:

Note: Whales seem to withdraw from Loopring and this is good for the price.

Below we can see the Glassnode Loopring Exchange 1 month reserve:

Note: Reserve goes up and might not be good.

Matic Network or Polygon (MATIC)

Below we can see the day Tradingview chart:

Note: Matic, another layer 2 solution solving the congestion problem with ETH seems to do good, although my view point is that it is going to consolidate for while , untill see some big move.

Below we can see the Glassnode Loopring Exchange 1m Netflow:

Note: This chart shows as the MATIC is either going to wither consolidate for while or even drop its price. 

Below we can see the Glassnode MATIC Exchange 1 month reserve:

Note: The monthly MATIC reserve drops and this is good as a microeconomics indicator.  Although in the short term I would not wait for a significant move. It seems that MATIC is in an accumulation phase right now.

Below we can see the Glassnode MATIC staking 1 month chart:

Note: Microscopically speaking the chart above shows that whales and retail are moving their MATIC out of staking and into the exchanges, which designates some serious price action move. Meaning that people either move to other altcoins or actively trade MATIC. This smells accumulation!!!

 

The Exit Strategy

 Introduction 

This article is going to focus on our exit strategy, this means I am going to explain when should we run away with our profits and buy the lambo. If this is the info your are looking this article is the right one for you. When talking about exit strategy these are the charts you should be looking for:

1. BTC Chart - BTC is the king, what ever BTC does Altcoins follow
2. BTC Dominance chart - This chart shows the money flow and is a serious indicator
3. Altcoin Market Cap - This chart shows the money flow for Altcoins

In this article we are going to analyse how the three mentioned charts behaved during previous market cycle. 

What is Bitcoin Dominance?

Below we can see the BTC dominance chart from 2015 to 2020:

Note: Bitcoin dominance is a percentage of the total cryptocurrency market capitalisation attributable to Bitcoin. According to CoinMarketCap, BTC now dominates 55.2% of the market. The BTC price is $58,139.11. Total market capitalization is  $1,966,834,918,015. 

During long-term market shifts, the dominance metric can show whether demand for Bitcoin remains higher than the market average. When market value increases, BTC dominance declines. As Bitcoin grows rapidly, the rest of the market is capable of pumping either at the time of local BTC corrections or when the benchmark is at least slowed down at significant resistance levels [1]. 

Price measures Bitcoin’s popularity. Dominance measures its popularity compared to other cryptocurrencies. Theoretically, this may mean investors are choosing quality. They are scared of the market risk and switch from tokens with less capital to a safer asset. It may also mean growing interest in the sector as a whole, along with the belief that Bitcoin is just the most reliable investment [1].

Below we can see a schematic visualisation on the relationship between BTC and Altcoins:

 

Note: If we divide the total market capital of Bitcoin by the total market capital of all cryptocurrencies and multiply the value by 100, we get Bitcoin Dominance. We can also find the dominance of any coin by doing the same step [2].

Bitcoin Dominance Versus Altcoin Price

When Bitcoin price goes up, the Altcoin prices go down and vice versa. Below we can see a schematic representation on the BTC and Altcoin relationship.

When BTC dominance increases, it means that investors in crypto are looking for a less volatile and safer investment. It is analogous to buying A-list stocks or YEN in forex or gold in commodities. During market uncertainty, investors shift towards less volatile and highly liquid assets like BTC rather than investing in altcoins with low liquidity and market cap. 

History of Bitcoin Dominance

Since the introduction of an additional 10 cryptocurrencies, BTC dominance has been mostly above 50% in terms of market dominance. Until November 2014, BTC dominance was above 90%. After the introduction of XRP, the dominance started falling and reached 78% when XRP dominance was at 13% during the first altcoins season. The dominance of BTC crawled back towards 90% in the beginning of 2016 until ETH got listed across exchanges, which took 13% of the market cap and led the dominance of BTC to drop down to the 70s before it again started crawling back up.

Note: The major drop in BTC dominance was in mid-2017 when Ether became extremely popular and it started looking like it can dethrone BTC. BTC dominance fell to 38% while ETH dominance peaked at 31% in June 2017.

Here is a tabular summary of the relationship between BTC’s dominance, BTC’s price, and altcoins’ price.

Note: When the tabular summary uses the word Stable, it means that the BTC chart price is consolidating or moves side ways.  Now when the BTC dominance increases (meaning investors and traders move to BTC market cap) and the BTC price decreases, means that BTC is being de-evaluated and at the same time market cap is being increased, and this might be a strong indicator of Bull run end.

Crypto Bull Run End

Bitcoin price is losing bullish momentum. Although it has still managed to hold above support at $55,000, after a failed attempt to clear the $60,000 resistance, the trend has been down over the last week. Jiang Zhuoer is the CEO of BTC.Top mining pool, he claimed things might continue to go south during the year. In a recent interview with Wu Blockchain citing “study models”, Zhuoer predicted a change in crypto market dynamics. Bitcoin’s price has seen gains of 824.4% in one year, but Zhuoer believes that between September 2021 and June 2021, the market could move “from a bull to a bear market.” [3]

Below we can see the BTC dominance chart with RSI and MACD oscillators:

Indicator of Bull Run 1:   Above we can see that due to the increase of the Altcoin market cap (there are over 10.000 Altcoins now days), over the time BTC dominance is reduced dramatically. When the price of the BTC starts reducing and the dominance starts increasing, then it is time to hit the road.

Below we can see the Glassnode NUPL chart:

Indicator of Bull Run 2:  Net Unrealized Profit/Loss is the difference between Relative Unrealized Profit and Relative Unrealized Loss. When BTC hits Euphoria, it is time to hit the road.

Below we can see the Glassnode aSOPR chart:

Note: The chart above is using spent outputs to predict bitcoin local lows and tops. The Spent Output Profit Ratio (SOPR) is computed by dividing the realised value (in USD) divided by the value at creation (USD) of a spent output. Or simply: price sold / price paid. This metric was created by Renato Shirakashi. The adjusted SOPR (aSOPR) is SOPR ignoring all outputs with a lifespan of less than 1 hour. 

Below we can see the Glassnode aSOPR chart on 2017 peak:

Indicator of Bull Run 3: Above we can see that there is some lagging above between the aSOPR peak and the big price drop of 10 days.

Below we can see the Glassnode aSOPR chart on 2017 peak zoom in:

Note: Above we can see the indicator hit above 1.08, which is local top top. 

Final Words

It is important to understand that the events will take place in the following order:

1. BTC dominance increases
2. BTC price consolidates
3. Altcoin prices increase
4. BTC price starts droping
5. Altcoin prices keep increasing
6. BTC price starts droping
7. Altcoin price starts droping

Also for the indicators you should be looking:

1. NUPL to hit blue
2. aSOPR to hit above 1.25 to 1.3 or for the risky ones above 1.4
3. Clear reversal of the BTC dominance and price drop for at least 2 weeks.

References:

• changelly.com  [1]
• www.altcoinbuzz.io [2]
  
• www.cryptoalphanews.com [3]