#103 On-chain Insights by IT Tech 💡🧠 - Week 46 Highlights & Analysis
Market Insights: Bitcoin Hits New ATHs Amid Liquidity Trends: An On-Chain Perspective.
Hello,
I’m excited to share the release of the 103rd issue of On-chain Insights by IT Tech 💡🧠! My goal is to empower you to perform your own market analyses or understand key metrics, ensuring that my content remains beginner-friendly and accessible to everyone.
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Table of Contents
🔸 Partnership with WymienBitcoina.pl
🔸 Crypto Weekly Highlights: Top 10 News You Can't Miss.
🔸 Current market situation
🔸 Bitcoin price and key levels
🔸 Bitcoin Price Peak: How High Could It Go?
🔸 Correlation between USDT and USDC market caps and Bitcoin price
🔸 Bitcoin and M2 Growth Global of YoY
🔸 Paid newsletter subscription - support content development
🔸 Newsletter issue summary
🔸 The exchanges I trade onPartnership with WymienBitcoina.pl
I'm thrilled to announce my collaboration with WymienBitcoina.pl, founded by Patryk Kempiński of the Krypto Raport YouTube channel.
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Here, you'll find all the essential charts for market analysis in one place. Enjoy! 👇
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Crypto Weekly Highlights: Top 10 News You Can't Miss.
From November 11 to now, the cryptocurrency industry has seen several significant events and trends:
Bitcoin's New All-Time High - Bitcoin has reached a new all-time high above $93,000, signaling continued investor interest and a bullish market trend.
Market Surge - Beyond Bitcoin, the broader crypto market has been experiencing a significant rally. Ethereum has also seen substantial growth, with Ethereum ETFs seeing unprecedented capital inflows of $295 million.
Memecoins Momentum - Dogecoin experienced a 48% surge, with investors aiming for a $1 valuation, showcasing the speculative nature of meme coins during bullish periods.
Solana's Growth - Solana has shown strong performance in the DeFi sector, with a total value locked (TVL) increase of 6.7 billion dollars and 44.5 million transactions daily, outperforming other L1 blockchains.
Institutional Investment - Goldman Sachs revealed holding a Bitcoin ETF worth $710 million, indicating growing institutional interest in cryptocurrencies.
Innovation and Investment - There's been notable investment in blockchain projects, like Google Cloud's $10 million for the BNB Chain Most Valuable Builder program, showing integration with major tech companies. Deutsche Telekom became a validator for the NEAR network, and there's been activity in digital bond issuance with projects like those by France's Caisse des Dépôts.
Critiques and Analysis - Ethereum co-founder Vitalik Buterin criticized Solana's developers, potentially influencing community discussions and perceptions.
Regulatory and Legal Developments:
The Federal Reserve Chairman, Jerome Powell, made comments on interest rates that could impact financial markets, including crypto.
SEC Chairman Gary Gensler and the SEC faced a class-action lawsuit, which might influence future regulatory environments for cryptocurrencies.
Market Sentiment - The sentiment on platforms like X shows a mix of excitement about Bitcoin's performance, expectations of an altcoin season, and discussions about regulatory changes that could affect the market.
Security and Scams - There have been reports of significant scams and security issues, like the FBI warning about $5.6 billion lost to crypto fraud in 2023, highlighting ongoing risks in the crypto space.
Current market situation.
Bitcoin has hit a new all-time high of $93,000, continuing its remarkable upward trend. Meanwhile, the buzz around a Meme Coin supercycle is gaining traction on the X platform, with meme tokens outperforming all other cryptocurrency categories. Check out the chart below for a closer look at this trend.
Whenever meme coin trading volume spikes, it typically signifies a peak in BTC value.
During the first half of last week, Bitcoin's dominance rose as altcoins faced a correction. Interestingly, meme coins remained relatively stable, showing sustained confidence in this sector. In the latter half of the week, Bitcoin's dominance decreased, sparking a strong recovery in altcoins and notable growth across the market.
Let's dive into the current market situation from the perspective of on-chain movements.
Bitcoin price and key levels.
Bitcoin's price has surged by almost 13% in a week. Meanwhile, ETH has seen a notable decrease in ETH to BTC pair.
As of November 17, 2024:
Current BTC Price: $90,613
🔹 SMA 365D: Long-term support at $59,196
🔹 Realized Price: Significant accumulation zone at $34,812
🔹 Short-Term Holders (STH) Realized Price:
1W-1M: $71,533
1M-3M: $61,989
3M-6M: $63,618
The current bullish momentum is supported by all key levels, with short-term holders providing additional market insights.
It is important to remain vigilant, as widespread euphoria often signals a good time to realize profits, potentially leading to a price correction.
Traders' unrealized profit margins are at high levels. The higher it is, the bigger the probability of a price correction. The current level is around 47%, previous peaks were in March at 69% and 48% in December 2023.
Bitcoin Price Peak: How High Could It Go?
Many people are wondering where Bitcoin's price peak might be in this cycle. Julio Moreno from CryptoQuant developed the Bitcoin: Realized Price Bands metric. This valuation is based on Bitcoin's Realized Price, which represents the average price at which all existing Bitcoin was last transferred.
Historically, Bitcoin's price has marked a cycle top at approximately four times the Realized Price, represented by the upper band (red dashed line).
The mid-band is calculated as twice the Realized Price, serving as a level where Bitcoin's price often encounters resistance or support.
According to this valuation, Bitcoin's price peak in this cycle could be around $139k. We'll revisit this in a few months to see how accurate the metric was and by how much it deviated
💡Do not fall into FOMO—stick to your plan and stay focused on your goals. A price correction will come sooner or later.Correlation between USDT and USDC market caps and Bitcoin price.
In the dashboard I use to prepare the weekly analysis for you, there's also a very interesting chart by Julio Moreno.
An increase in the market capitalization of stablecoins (USDT and USDC) is often correlated with a rise in Bitcoin prices, suggesting greater liquidity and demand in the market.
A decrease in stablecoin market capitalization may indicate increased cryptocurrency selling and reduced liquidity, which could lead to a drop in Bitcoin prices.USDT Daily Market Cap Change (in million USD)
2024-11-11: +133.44M USD
2024-11-12: +876.19M USD
2024-11-13: +1,114.58M USD
2024-11-14: +1,103.71M USD
2024-11-15: +829.51M USD
2024-11-16: +102.15M USD
Net USDT Market Cap Change: +4.16 billion USD
USDC Daily Market Cap Change (in million USD)
2024-11-11: -3.91M USD
2024-11-12: -412.94M USD
2024-11-13: +123.61M USD
2024-11-14: +35.58M USD
2024-11-15: +155.30M USD
2024-11-16: +226.09M USD
Net USDC Market Cap Change: +123.63M USD
Combined Net Market Cap Change for USDT and USDC (11.11 to 16.11)
Total Combined USDT and Net Change (11.11 - 16.11): +4.28 billion USD
Conclusion:
The significant +4.28 billion USD combined net market cap change for USDT and USDC over this period reflects a strong inflow of liquidity into the cryptocurrency market. This inflow supports increased buying power and may indicate growing confidence among investors. The sustained inflows into both stablecoins highlight a bullish market sentiment, potentially providing support for continued upward momentum in Bitcoin and other major cryptocurrencies.
Bitcoin and M2 Growth Global of YoY.
This chart highlights an intriguing relationship between global money supply growth (M2 YoY) and Bitcoin's (BTC) price:
Insight:
Increase in Global Money Supply (M2 YoY):
During 2020–2021, amidst the COVID-19 pandemic, the significant increase in global money supply (high YoY) coincided with a dramatic rise in Bitcoin's price, reaching new all-time highs (ATHs).
This illustrates that loose monetary policies (e.g., money printing and low interest rates) drive interest in alternative assets like Bitcoin.
Decline in M2 YoY in 2022–2023:
As the global money supply growth slowed, Bitcoin entered a bearish phase, underscoring its reliance on overall market liquidity.
Reversal of Trend in 2024:
In 2024, M2 YoY shows signs of recovery, currently at +2.5%. While significantly lower than the pandemic peak, it indicates improving global liquidity.
Bitcoin appears to be responding positively, suggesting that increased liquidity could once again support its price growth.
Conclusion:
Bitcoin demonstrates a strong correlation with global liquidity (M2 YoY). When liquidity increases, its price typically follows, highlighting its role as a "digital store of value." Monitoring further recovery in M2 YoY is crucial, as it may bolster the ongoing bullish trend in the cryptocurrency market.
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Newsletter Issue Summary
Crypto Weekly Highlights: Bitcoin hits $93K, Ethereum rallies, meme coins surge, institutional investments grow, and regulatory discussions intensify.
Current Market Situation: Bitcoin's dominance fluctuates, meme coins gain traction, and altcoins recover as BTC continues its bullish trend.
Bitcoin Price and Key Levels: BTC is at $90.6K, supported by levels like SMA 365D ($59K) and realized price ($71K). Correction risks grow amid high optimism.
Bitcoin Price Peak: Based on Realized Price Bands, Bitcoin's price could peak at $139K this cycle.
USDT and USDC Correlation: A combined $4.28B inflow into stablecoins suggests growing market liquidity, boosting Bitcoin’s upward trajectory.
Bitcoin and M2 Growth: BTC price correlates with global liquidity (M2 YoY). Recovery in 2024 supports a bullish trend.
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Forecast for the Upcoming Week:
Bitcoin Price Action: Bitcoin might test resistance near $93K, with $100K as a psychological barrier. A potential correction is likely due to high unrealized profit margins.
Stablecoin Liquidity: Continued inflows into USDT and USDC suggest strong market liquidity, which may sustain bullish momentum.
Global Liquidity Trends: Recovery in M2 YoY growth could act as a bullish catalyst, providing additional support for Bitcoin.
Altcoin Outlook: As Bitcoin dominance stabilizes, altcoins, including Ethereum and Solana, may experience further growth in the near term.
Stay alert and monitor these key indicators for better market insights.
You can track important upcoming market events in the US and the EU using the Economic Calendar, which offers free access.
Patience in investing pays off by understanding the market's cyclical nature and recognizing the recurring patterns and behaviors of investors.💡Take a look at the indicators used in the dashboard. For current updates from the market, of course, drop by me on X/Twitter and the free Telegram channel.
Remember to realise profits regularly.💡
This concludes this issue. I hope you have a pleasant end to your weekend and a great week ahead. 🤝
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Please note that the information in this article reflects my personal views on the cryptocurrency market and should not be taken as investment advice or recommendations. Investing in cryptocurrencies involves a high risk of losing capital. This article includes brand mentions of WymienBitcoina.pl and affiliate links to services that may provide benefits to the author.
Best regards
IT Tech