Indicators show that we are at the beginning of a bull market cycle | Author: Rubikkav | Capital | July 2021
according to Monetary metrology, After more news from China’s regulation, the crypto market fell again in the past week, including the People’s Bank of China Tell the country’s major financial institutions to stop facilitating cryptocurrency transactions with one Huobi derivatives banSince the beginning of the crash on May 12, the market has now fallen for nearly seven weeks.
However, even if many big players lack interest in large-scale purchase intentions, as we said, on-chain indicators show what technical indicators cannot. For this reason, it is effective to understand what is behind the indicators that really bring positive aspects to what we are currently experiencing.
According to reports CryptographyIn the chart released by the analysis company Chainalysis, Bitcoin (BTC) transaction strength showed a record drop on Monday, June 28, which was the second day after the indicator reached its maximum value so far this year.
This indicator is included in the Chainalysis market intelligence report, which compares the value of the trading order book with the inflow of BTC on the exchange. According to data from Chainalysis, as of Sunday, June 27, the ratio was 14,383, the highest level this year, but it fell to 5,745 this Monday.
The drastic change in this indicator can be explained by a drastic change in the proportion of market participants who want to buy BTC compared with market participants who are willing to sell. According to Chainalysis data, although there were more participants who were willing to buy than those who were willing to sell last Sunday, this situation will be completely reversed this Monday.
However, personally, this indicator may reflect that we may be in a transitional period, and many investors are more willing to obtain income at a cheaper price. If we look closely, after the price drop, June is a month of extreme accumulation.
Very interesting thing Monetary metrology In his last report, he stated that fundamentalist indicators support the beginning of a true bull market cycle. Opinions that are consistent with our main analysis and our personal opinions. This is just the beginning.
Coinmetrics stated that every four years, the supply of Bitcoin will decrease by 50%. So far, there have been three such halvings, the most recent on May 11, 2020. Each halving effectively marks the beginning of a new cycle. The 2013 cycle peaked at 370 days after the first halving, and the 2017 cycle peaked at 524 days after the second halving. We are currently 413 days after the third halving.
In addition, it said that historically, the MVRV between each cycle has fallen below one. There was a double peak in the 2013 cycle. The initial peak on April 9, 2013 was $230, and the second peak was $1,134 on December 4, 2013.
The price fell to $66 between the two peaks. But after the first peak in 2013, MVRV fell below 2, but never reached 1.0. After the second peak in 2013, MVRV fell below 1 for the first time on September 28, 2014.
In 2017, BTC reached a peak of $19,640 on December 16. After operating in 2017, it fell below 1 for the first time on June 13, 2018.
After that, after the last halving, we saw that many people had the intention of buying in order to maintain long-term accumulation and retention. No one wants to lose a new bullish cycle or stay away from gold mines, but as we have seen, we are only in the correction of Moon Wave 2. Many people consider this to be a simple bullish start to the end of the cryptocurrency market.
On the other hand, with regard to the so-called age or period of concealing Bitcoin, how does cryptocurrency know? Chainalysis compared three groups. Those BTCs that have moved in the past two weeks, those that have held BTCs between 2 and 52 weeks, and finally BTCs that have not moved for more than a year.
The figure below shows that the dominant BTC group 9.37 million has not moved for more than a year, while the group holding more than two weeks and less than a year is 9 million BTC. Only 330,000 BTC has a retention period of less than 2 weeks.
The percentage change in these groups can be interpreted as favoring a possible upward rebound in prices, because the BTC group holding less than 2 weeks has decreased by 71% in the past 180 days, while the middle group has increased by 21% in the past 180 days. The same period. At the same time, according to Chainalysis, the older BTC has declined in the past three months, although it has only fallen by 6%.
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