Markets Pull Back But On-Chain Indicators Hint At More Upside

It looks like crypto isn't correlated to traditional markets, at least not during this past session. With good retail data and earnings from large retailers, investors bought equities, betting on increased consumer spending -despite rising prices. We can see the major US indexes closing in the green while gold, the inflation hedge, fell more than half a percent.


BTC was also down yesterday, along with the entire crypto space. After an intraday drop of 8% to about 58K, BTC is now closing the session 5% down, at just a tad above $60,000.


Alts did broadly underperform but not by a crazy amount, you can see the BTC Dominance index just rising slightly, to now 43.70.


Besides AVAX that is somehow still rising (about 6%), the rest of the altcoins are just clearly down. Amongst the worst performers, we see ZEC down 15%, DYDX down 10%, STX and VET down about as much. Basically, as always, in moments of panic, you’re better off just holding BTC.


For the rest of this briefing, I just want to share two charts:


The binary CDD (which stands for coin days destroyed) tracks the amount of coins moved off of a wallet -in many cases to be sold- but also takes into account the amount of time that a coin wasn’t moved. If you think about it, it basically gives more importance to a coin that was held for a long time and is now spent, versus the coins from a short-term holder. And this gives us a sense of the time horizon and the psychology of the market and the cycles. Right now it looks like there is some spending, which is indicative of higher prices but also not large amounts of selling which hints at no exuberance and investors holding out for even higher prices.



Second, still a chart by Glassnode, is the hodl ratio which tracks the number of new coiners, entities that are now loading up on coins, versus old coinersthat are long-term holders and buyers of significant dips -which doesn’t phase them. This also gives us a view of market psychology, whether we’re overheated and there’s FOMO from a lot of new entrants, or if we’re oversold and only diamond hand holders are buying and holding. Right now, we’re halfway through. This is a good place to be. Prices are undeniably much higher than when we were at 10K or 20K, but it also alludes to the fact that we’re also not overheated at the 60K market.


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Justin d'Anethan
Justin d'Anethan

Head of Exchange Sales at EQONEX. Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.

Daily Market Update
Daily Market Update

A quick market update (1-2min read). Every week day, morning in Asia, I go over major moves in macro and crypto markets, linking fundamentals to price action.

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