Welcome to CSI (Crypto Supply Investigators): Qluster | On-Chain Outlook, Edition #46 (13/07/2022)
A turning point in the market? Or merely a mirage in a desert? Join the CSI: Qluster team as we dig deeper. Read on for more 👇
(This article has been written by Vũ Nguyen and edited by Andy Phung)
Part 1 | Short Term
Following the recent surge in the US stock market Since 14th July, the crypto market has reacted positively. So how did on-chain data perform in this situation, and does it line up?
Let us find out in our latest on-chain report.
We have observed a visible drop in upside momentum for Supply on Exchange (SoE), taking the pivot from 11th July.
This data illustrates a situation where both SoE and Price go up.
On the second biggest crypto, things are getting impressive.
SoE has broken down the two moving average exponential (EMA) 30 and 50, resulting in a +50% surge.
This decline marks the end of the impulsive wave of SoE since 30th April, with the bull signal obviously could be tracked back on 14th July.
And for digital assets like cryptocurrency, we're only just getting started 👇
Part 2 | Long-Term
Nothing new about Bitcoin has changed from a long-term perspective.
Long-term investors continue to hold the line as SoE keeps maintaining below the EMA area.
Sometimes no news is the news itself.
Our team identified an interesting behavioural phenomenon of Ethererum SoE in the long-term;
If Ethereum successfully bounced down from 7-days EMA (30) and (50), it would be a strong indicator of upcoming positive performance and recovery.
If Ethereum managed to bounce down from this value area, it would be somewhat similar to February 2016 and March 2017.
Part 3 | Confirmation
In dealing with this significant change of behaviour, one must seek another source of data to verify the validity of the analysis.
The more sources of accurate data we have access to, the better we can paint an unbiased picture of the events around us.
Today, we choose the ALTPERP metric provided by the FTX exchange, a basket of multiple cryptocurrencies, to review if there is a driving force in price.
As a result, there is indeed an impulsion that drives price momentum to the upside.
However, one caveat we must also be aware of is if ALTPERP plunges back to the 1650 price line, then the current bullish wave will be invalidated.
Well done! You’ve almost made it to the conclusion. Help us share this research before reading on 👇
Part 4 | Conclusion
To conclude readers, we are left with the following observations:
⦁ Both short-term SoE of Bitcoin and Ethereum observed a decline.
⦁ The long-term SoE of Bitcoin is still in the downtrend; nothing new on-chain has occurred.
⦁ The long-term SoE of Ethereum displays a key behaviour that could affect its structural development in supply and demand. Could indicate the start/end of a cycle.
⦁ The ALTPERP index confirms the upside momentum of crypto.
See you again for the next update.
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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