Everyone is Optimistic and Cautious

Everyone is Optimistic and Cautious


2023-03-31 19:00:42

Market situation

US stocks January 16 was a bullish session, with Nasdaq’s biggest gain of 0.71%. However, stock futures are tilted to the downside. Gold and oil prices fell slightly to around 1913 USD/ounce and 79 USD/barrel.

Although the stock market had a bad year last year and fell significantly, the Fear and Greed index of stocks is returning to 63. This level shows that the market is greedy.

Bitcoin continues to hold around $21,000. BTC price rose and held around $21,000, surprising many people. Altcoins also rose.

The price increase caused the profit rate of BTC to also increase to more than 68%. This level has left the green zone (below 50% of BTC profit rate) which is supposed to be a good accumulation zone.

The RHODL Bitcoin Index remains in the green zone.

The Bitcoin Market Cap to Thermocap Ratio has also just left the green zone.

Although most on-chain indicators have left the accumulation zone, it is difficult to know for sure if the BTC price has seen a bottom. The NUPL indicator is used more to predict the bottom of BTC. This indicator shows that BTC price has been in the depressed zone (pink) for some time and has moved into the hope zone (orange).

A BTC article on the top of CNBC has been more positive with BTC spending up 28% since the beginning of 2023. Some of the reasons given by the article as BTC recently went with the trend of stocks. However, this reason is not true because recently the correlation between BTC and stocks has decreased and BTC has followed its own trend.

The next reason the article says that the increase in BTC price is due to whale buying and the BTC halving event that will take place next year affects. These two reasons are quite true because there is evidence of on-chain data showing a recent increase in the number of BTC wallets of 100 BTC or more. The BTC halving event that causes the amount of BTC mined in each block to be halved also affects the price. However, there are some information mentioned in the article that are not reasonable such as calling BTC a token, or whale transactions are determined to be only worth between 700 USD and 1000 USD, because whales are valuable. transactions are usually much larger.

Where do selling and buying forces come from?

Bitcoin’s Fear and Greed Index is at neutral (51). It has been a long time since this indicator stayed at fear level before turning neutral.

The recent BTC price increase is partly due to the accumulation of whales. Santiment also shared data showing that wallets with a BTC count of 100 BTC or more accumulated large amounts of BTC within the past 10 weeks. This is the buying force that causes the price to rise.

Besides, the selling force in the market comes from the wallets that are profitable when the price increases. BTC as well as ETH profit takers have been taking profits recently. Based on BTC and ETH moves, Santiment shared that BTC profit taking reached its highest level since February 2021. The amount of ETH taking profit reached the highest level since October 2021.

Glassnode data shows the same thing. The Bitcoin Realized Profit/Loss Ratio is also at a profitable level.

However, CryptoQuant’s on-chain data shows that long-term investors are losing slightly. The Long Term Hodler SOPR is at 0.923. And the Short Term Hodler SOPR at 1.13 shows that short-term investors under 155 days are profitable.

Miners also showed signs of selling when the price increased, but the selling volume was not high. The amount of BTC from miners’ wallets put on the floor is low.

The amount of BTC deposited on exchanges is also low.

The number of leveraged orders on exchanges is not high, especially after the FTX event.

In general, the market was more optimistic. The optimism shown in on-chain indicators has left the green zone, a good zone for accumulation to turn to hope. However, investors are still quite cautious at this point. Investors are still watching to see if BTC has indeed recovered or will continue to fall.

Other information:

  • Custody of Binance Custody has announced the official launch of Binance Mirror. Through Binance Mirror, institutions lock a certain amount of their asset balance available in the Eligible Wallet, Binance Custody’s cold storage solution, and mirror that amount into their Binance Exchange account. them with a 1:1 balance. Their assets remain secured in a segregated cold wallet as long as their Mirror position remains open on the Binance Exchange, which can be settled at any time. This service gives institutional investors more peace of mind because their assets will be stored in cold wallets more securely.

  • Coinshare’s chief strategy officer predicts that Bitcoin will likely be trading in the lower range between $15,000 and $20,000 and at the higher end between $25,000 and $30,000. At the same time, she doesn’t see any signs of a sell-off right now and doesn’t see the possibility of a sharp increase in the price of BTC between $50,000 and $100,000 as cash flow is still tight.

  • Kyle Davies and Su Zhu, both founders of Three Arrows Capital, have founded a new company specializing in acquiring assets of bankrupt companies. They are planning to launch the company by the end of February at the latest. Three Arrows Capital is the first company to go bankrupt, leading to a series of other crypto companies falling into the same situation.

  • Former FTX.US President Brett Harrison speaks out about FTX. He was someone who worked with SBF before he founded FTX. When he was invited to FTX to work, he was mainly in charge of human resources and operations. As for the important information related to the floor mechanism, only an internal group of SBF knows. During his work, there was disagreement about his proposed measures to protect customers but were not approved. He admitted that he had no knowledge of FTX’s wrongdoing and admitted the case involved fraud. His speaking up because he is calling for investment for his new company but suffers from a bad reputation from FTX.

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