(This article has been written by Vũ Nguyen and edited by Andy Phung)

Part 1 | Short Term

US stock indices broke out from the short-term resistance on 14th July and then surged last Monday 27th. 

What was the crypto market doing at the time? Eating crayons?

No! Of course not.

The crypto market saw that as jolly good fun and decided to get in on the action.

Cryptocurrencies have boosted, with most coins climbing higher in the last two weeks: [FTX: ALTPERP ⇧$1966]. 

However, on-chain Supply on Exchange (SoE) data shows several contradictory signals we need to consider to unveil any hidden market conditions of Bitcoin and Ethereum.

Bitcoin

SoE touched the top resistance of EMA(30,50) [BTC: SoE ⇧9.496]. However, unlike the last week, Bitcoin observed a rise to the weekly pivot at $24,600 and now is holding at $22,800. 

Note that SoE has breached its short-term resistance limit, the EMA(50), approximately at 9.482, meaning that there is an increase in the number of Bitcoin deployed to exchanges.

Ethereum

We also observed a surge in the second biggest crypto. Ethereum is now holding at +57% since its bottom pivot [Coinbase: ETHUSD $1609]. 

However, SoE also broke up the resistance EMA(30,50), indicating increased supply on exchanges [ETH: SoE 13.88]. 

This uprising presents that savvy and clued-in investors may also sell part of their coins when they have finished accumulation/dollar-cost averaging or simply taking profit to cover their stop-losses. 

Therefore, we keep the previous view that unless SoE reaches below 13% again, this surge in supply could not seem to slow down.

And for digital assets like cryptocurrency, we're only just getting started 👇

Part 2 | Long-Term

Bitcoin

Once again, we have a repeat of last week. From the long-term perspective, there is still no news on the Bitcoin front. Long-term investors continue to hold as SoE keeps maintaining below the EMA area. 

However, one should note that the gap between Long-term SoE and its EMA(30,50), which locates at around 10-11%, is getting closer. Eventually, the metric has to move substantially towards a direction, so do not get yourself off-guarded.

Ethereum

Ethereum SoE regained some of its forces and contacted the top resistance of EMA(30,50), located at the 14% mark. 

We keep the view that unless SoE went down to break the now-support EMA(30) at the 13% mark, the risk of a surge in Long-term supply similar to July 2018 still exists.

ALTPERP touches the support! Let us hold our breath

Following the previous report, the FTX's Altcoin Index basket ALTPERP has broken from its short-term resistance $1990-$2000 range, thus invalidating the previous bearish perception. 

This change marks a flip in market condition perspective from bearish to bullish, at least in the short-term window. 

However, it is notable that during these uncertain market conditions, things can change very quickly. It is not solely related to the technical but fundamental, political, and macroeconomic factors. 

Therefore one should be very objective about the market's movement and strictly follow where the market has taken direction (technically you should be doing this already).

Well done! You’ve almost made it to the conclusion. Help us share this research before reading on 👇

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Part 3 | Conclusion

⦁ Both short-term SoE of Bitcoin and Ethereum observed a surge while prices rose. Big players are considering selling against the direction of price.

⦁ The long-term SoE of Bitcoin is still in the downtrend, but the closing gap between SoE and EMA(30,50) indicates that macro-structural movement will happen soon.

⦁ The long-term SoE of Ethereum is still within the Long-term EMA(30,50); if it fails to bounce below 13%, then the bearish cycle is still intact. 

⦁ The cryptocurrency market breaks out of the $1990-$2000 range. So now ALTPERP has to maintain that line to keep its bullish momentum.

⦁ Unlike most people trying to pick the top/bottom, savvy speculators/investors do not wait for the top to book their profit. They will not hesitate to exit if these conditions get ugly, threatening an impending market selloff.

See you again for the next update.

- q

Did you learn something new in tonight’s research feature? Let us know in the comments to help us deliver more quality crypto and blockchain research 🤗

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