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Anachin’s exclusive analysis (28 December); Is Crypto Winter Over?

تحلیل اختصاصی آنچین

After a December that was one of the least volatile periods in bitcoin price history, 2023 started off strong, with the price of bitcoin exploding after reaching the 17,000 level and gaining 23% in one week to the 21 level. Received $500. But is this impressive growth just a sunny day in the middle of the crypto winter, or can we say that the market trend has changed and we are at the beginning of an uptrend that will join the Bitcoin halving in 2024?

The dramatic rally, which caught many market watchers by surprise, pushed the price of Bitcoin back to pre-FTX crash levels in mid-November and broke several key resistance levels. As seen in the chart below, Bitcoin price is now above the 200-day moving average (the $19,500 level and the green curve on the bottom chart). However, the 200-week moving average, which shows the level of $24,780 (red curve in the lower chart), will act as a serious resistance in the direction of the Bitcoin price increase, overcoming which can be a sign of a reliable trend reversal.

Bitcoin guardian and moving averages
Bitcoin price in daily time frame and simple moving average of 200 days (green) and 200 weeks (red); Source: Trading View

There are various tools for analyzing the price of Bitcoin in general and analyzing the general trend of the cryptocurrency market. We believe that by continuously reviewing such information or within the chain, the events and happenings of this market can be evaluated and analyzed more deeply and accurately. In this regard, Blockchain Homeland plans to publish a market performance report focusing on information and data within the network or On-Chain.

disclaimer

The following report is an exclusive analysis of blockchain homeland based on on-chain (on-chain) data. The information and analysis in this article should not be considered as a recommendation for buying and selling or investing. Do not forget to always analyze and check the market yourself before investing.

This edition is the 58th report in the series Such exclusive analysis It is the homeland of blockchain. To read the previous report, refer to the following article.

Overview of market conditions

In the current situation and with the increase in the price of Bitcoin, one of the most important things that must be examined is the ratio of the current price to the realized price. As mentioned above, the price of Bitcoin is currently higher than the realized price, but a separate calculation of the realized price for short-term and long-term holders reveals some interesting points. As seen in the chart below, the realized price for short-term holders (155 days and less) was around $18,000, which was strongly outperformed by Bitcoin. Also, the price of Bitcoin is higher than the realized price ($19,700). However, the realized price for long-term holders (more than 155 days) is currently $22,400 and is considered an important resistance for the price of Bitcoin.

Realized price for short and long term holders
Realized price separately from LTH and STH; Source: Glassnod

It is also interesting to note that the aSOPR index, or the Spent Output Profit Ratio, whose 7-day exponential moving average can be seen in the chart below, retested level 1 after the recent price growth, and retesting this level and confirming it can be a sign of change. market trend in the medium term.

aSOPR
modified output profit ratio index; Source: Glassnod

Checking the balance of Bitcoin exchanges

As can be seen in the graph below, at the same time as the Bitcoin price increases, the changes in the Bitcoin balance in spot exchanges have been positive. This position is a sign that bitcoin holders, especially short-term holders (155 days) whose cost basis is around $18,000, have brought their bitcoins to exchanges for sale.

Bitcoin balance changes in exchanges; Source: CryptoQuant

Meanwhile, it can be seen that the stablecoin inventory of centralized exchanges is decreasing (bottom chart).

Exchange stablecoin inventory
Stablecoin inventory of centralized exchanges; Source: Cryptocoin

In this way, with the increase in the supply of Bitcoin and the decrease in the supply of stablecoins to buy it, it seems that the upward momentum of the price of BTC is eroding.

Investigating the behavior of Bitcoin investors

As can be seen in the chart below, the number of holders with 100-1000 bitcoin balance (red curve) has grown significantly during November and December and after the fall in the price of bitcoin at the same time as the collapse of FTX, but in the recent upward rally, the number of these whales is relatively stable. and even after the price reached above 21,000 dollars, these people have made some profit.

Holders with a balance of 100 to 1000 bitcoins
the number of holders with a balance of 100 to 1000 bitcoins; Source: Sentiment

Also, if you carefully look at the chart below and examine the general behavior of bitcoin holders in the developments of the last 2 months, you can see that first the sharks (black curve, holders with 10 to 100 bitcoins) started buying, then the small whales (black curve, holders with 100 to 1000 Bitcoin balance) started buying, and finally, with the entry of big whales (yellow curve, holders with 1000 to 10,000 Bitcoin balance), the price of Bitcoin entered a significant upward trend and more than 20% increase in price. We experienced last week.

The Behavior of Bitcoin Whales
The behavior of Bitcoin whales; Source: Sentiment

Bitcoin derivatives market review

Bitcoin’s surprise rally last week led to the liquidation of a huge volume of Bitcoin short-sell transactions, and the volume of liquidations reached the highest level in more than three months (bottom chart). This was so impressive that Arkin Research Institute, as mentioned in this morning’s article, sees the liquidation of the huge volume of short trades as the main driver of the recent bullish rally.

Bitcoin liquidations
The volume of bitcoin liquidations in centralized exchanges; Source: CoinGlass

In the current situation, the funding rate of Bitcoin is positive in centralized exchanges, which indicates that bullish sentiments prevail over the market. However, as can be seen in the chart below, after retrieving the $17,000 level, the funding rate has been consistently bearish, indicating a decline in the bullish momentum in the Bitcoin market.

Funding Rate Bitcoin
Bitcoin funding rate in centralized exchanges; Source: Cryptocoin

Checking the status of Bitcoin miners

With the increase in the price of Bitcoin last week, for the first time in more than 3 months, the price of Bitcoin reached above the average cost of mining.

Average Bitcoin Mining Cost
Average Bitcoin mining cost; Source: macromicro

Also, one of the interesting events of recent days was the re-recording of Bitcoin’s hash rate. This has caused one of the most important indicators of the market situation, namely the hash ribbon, to issue a bullish signal. As can be seen in the chart below, the 30-day moving average of hashrate (blue curve) has once again reached above the 60-day moving average of hashrate (purple curve), and the hash ribbon that Bitcoin has been on for the last 6 weeks has come to an end. As can be seen in the chart below, hash ribbon completions have historically been a very bullish signal in the Bitcoin market, and we have experienced a significant bull market following the completion of each.

Bitcoin hash ribbon
Bitcoin Hash Ribbon Chart; Source: LookIntoBitcoin

final word

After the significant growth of the price of Bitcoin last week, many such indicators, especially Hash Ribbon, have issued a bullish signal about the state of the market. However, other indicators of the state of the derivatives market, as well as the examination of the balance of Bitcoin and stablecoin in centralized exchanges, show that the upward momentum of the market is declining. All this is in the context that the recent growth of the market has been faced with the improvement of the stock market conditions, which many believe that the reversal of the trend is very likely.

Of course, the result of this article and all the things mentioned in it should not be the final criteria for making investment decisions. Instead of directly analyzing the price, we try to know the factors influencing the price fluctuations of cryptocurrencies in order to have a more accurate analysis of the market. If you have experience in this field or you have found information about that specific China that affects the price of cryptocurrencies, share them with us.

The homeland of blockchain

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