Papi
After Selloff: Next Steps for Traders & Review of Popular On-Chain Data
The past couple weeks were euphoric, we broke new highs on Bitcoin, altcoins were running hot! But once again we find ourselves under the previous high. Is the bull market over? There is no major indication the bull market is over. Historically, Bitcoin cycles never stopped at previous all-time highs (ATH), and with the ETF and Halving momentum, there is no reason to expect that now. In 2020 it took nearly two months to escape the previous ATH range. If you are confident we go higher (as I am), this is an excellent opportunity to stack more or rotate a into high performers. Lets review some popular data points: 1. Supply of Bitcoin on Exchanges: nearly 40% drop in 4 years, and no signs of slowing into 2024 Halving. More Bitcoin is being bought and HODL’d than is being mined, and this has been the prevailing trend since 2020. As we know with commodities, scarcity boosts perceived value. This new trend suggests that we won't see a pronounced rise in supply towards the end of the cycle. 2. Net Unrealized Profit and Loss (NUPL): moderately bearish on LTF, but room to run on HTF. NUPL cooled off with the current correction but is still trending into the greedy range of “belief,” where traders are mostly in-profit, but holding and expect more upside. 3. Miner Position Index (MPI): low selling pressure over the past two weeks, no signs of major selloff. 4. Bitcoin Netflow (All Exchanges): LTF rise in sell pressure, but flows remain overall bullish in recent weeks, even through this correction. 5. Market Cap to its Realized Cap (MVRV): cooled off after a small rejection along 2.8 minor resistance. For the first time, the long term (2013) diagonal resistance is lower than historically bearish horizontal level (red) of ~3.7 for cycle tops. Monitor both this cycle. Sentiment: 1. Coinbase App: Dropped >200 ranks to ~500 globally; 50 in finance 2. Google Trend "Bitcoin" saw a strong drop after reaching 3rd highest level in 3 years.