Tuning Up the Crypto Markets, On-Chain Outlook, Edition #21 (07/01/2022)
Week 1: Done & Dusted 🚀 Read on for the latest assessment of the on-chain metrics from Qluster Data Labs now 👇
Price Action tangoes into the New Year. On-Chain keeps on Waltzing.
Welcome back to another brand New Year of trading research!
This tentative period is undoubtedly a time to be excited about the many prospects that await us on the chain ahead in the year.
Especially these days, a trader or investor is no stranger to excitement...
And unsurprisingly, the past week of price action has failed to disappoint.
Cryptocurrency markets appear ready to tango - observe Bitcoin start the year with a sharp decline of roughly 12%.
But, in the domain of On-Chain?
When reviewing the key metrics, Qluster Data Labs observe the trend for both supply-on-exchanges and outside exchanges remains comparatively static.
If you missed the prior On-Chain reports covering Bitcoin and Ethereum, make sure to check out the articles below:
Embracing a holistic view of cryptocurrencies generally helps build a robust understanding of the macro-environment.
In particular, the ability to identify where Bitcoin sits in any given cycle can prove a valuable skill in the analysis armoury.
The sentiment for a continued Bull run was initially scoped for Sep 2021, then Dec 2021 and even Mar 2022. Q digresses there has also been a notable increase in negative sentiment within cryptocurrencies over the past weeks.
US$45K - US$48K was a critical region of support after the recent decline, which broke after testing this range for over 30 days.
🤔 Here's a challenge to get those brain cells working 🤔
A test for all of our readers is to identify any other key support regions that might:
Hold as demand before another leg up
Act as a consolidation point before dropping further
Leave your answer in the comments below 👇
There is no single way to predict what the market will do next with absolute certainty.
We're all traders, investors and enthusiasts - not mystics!
Although, On-Chain analysis can undoubtedly assist in developing a nuanced interpretation of the markets. These benefits can extend to all manner of cryptocurrency trading repertoires.
When exposed to markets - such as cryptocurrencies - and volatility is the norm, it is paramount to understand what is truly essential.
Risk Management is 🔑
Q notes that these periods can either make or break traders. In some cases, the rapidly fluctuating conditions can highlight glaring weaknesses in any individual's trading strategies.
The legendary Ray Dalio refers to the importance of radical honesty and radical transparency.
Dalio explores these principles and others in his book Principles.
One key takeaway - where required, there is no shame in reducing risk on positions and protecting capital. In any situation, it is often recommended.
While allowing the dust to settle over weekend trading, Q looks forward to another instalment of Charting with Griff (coming soon).
Our premium subscribers can help the team choose charts for Griffin to analyse in the video report. Become a monthly or yearly subscriber now 👇
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See you again for the next update.
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