Bitcoin, Ethereum and ChainLink: On-chain outlook, Edition #6 (22/06/21)

Supply on exchanges is decreasing whilst external wallets accumulate. Is this bullish for Cryptocurrency markets, or is it just overly bullish whales?

Despite Bitcoin’s bearish price action and our re-visit of 31-32k, our on-chain metrics still paint a similar story to before. Supply outside of exchanges continues to an uptrend with supply on exchanges is reducing. 

This case can be seen with Bitcoin and other major altcoins such as Ethereum and Chainlink.

Supply Analysis

  1. Bitcoin (BTC)

  2. Ethereum (ETH)

  3. Chainlink (LINK)

We must remember that even if our on-chain analysis dictates that larger wallet holders are accumulating, these larger holders or whales can still be incorrect at finding bottoms. As mentioned in previous on-chain editions, Bitcoin price action is king and even whales can be wrong (in the short term usually).

The recent price action has been driven by multiple factors, including but not limited to, a strengthening US dollar and a China crypto ban with several banks banning deposits. It’s important that you as an investor take all factors into consideration: macroeconomic, technical, fundamental and on-chain. As shown today, macro factors such as the China ban and the US dollar is trumping over any on-chain analysis.

One thing we do believe is that on-chain is only one piece of the puzzle, albeit an important one. Use the above information plus what has been shared in previous editions to help you plan how to average into a position.

See you again for the next update.

- q

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