A bitcoin price crash this week provided investors with an attractive moment to enter positions in the bitcoin market.
While most people reading this article are likely aware of the tweets that were sent out by Elon Musk on Bitcoin mining, his comments are simply noise, and the resulting price crash and derivative market liquidations provide investors who may have been waiting for an attractive moment to enter positions with a great opportunity.
The long-term trends observable in and around the Bitcoin space remain extremely bullish, and the recent three-month consolidation can be thought of as UTXOs simply transferring from weak hands to strong ones, as short-term leveraged traders in derivatives markets have chopped the price of bitcoin in the range of $44,000 to $64,000.
Short-Term HODLer SOPR: Flashing Buy Signal
Short-term HODLer SOPR (36h MA)
With short-term traders setting the price at the margin over this period of consolidation, it is telling to look at short-term HODLer SOPR, which measures the ratio of profit/loss of UTXOs being spent that are less than 155 days old.
Over the course of the last six months, any SOPR break below one has, in hindsight, presented investors with an attractive buying opportunity, and this week’s move should be treated no differently.
An SOPR value less than one implies that the coins moved that day are, on average, selling at a loss (the price sold is less than the price paid), thus when SOPR breaks under one, it is a signal that short-term market actors are capitulating.
Derivatives Markets: Short-Term Tail Wagging The Dog
Futures perpetually funding rate across exchanges since November 2020
While the long-term price action is driven by the monetary preferences of the world changing from fiat money to BTC, short-term price action is driven by leverage and derivatives markets. There have been very few times during this bull market when funding across perpetual futures markets went negative on average for more than 12 hours. This occurred earlier this week, and presented investors a screaming buy signal.
Total long liquidations across bitcoin exchanges
Big Withdrawal Following The Sell Off
Directly following the cascade of liquidations and the sharp correction in the price of bitcoin all the way down to $45,000, a massive outflow of bitcoin could be observed leaving exchanges, an indication that some big time players secured positions at attractive prices as a result of the sell off. While this is purely speculation, it would not surprise me at all if the FUD (read: fear, uncertainty and doubt) thrown out all toward the end of this week was simply chance.
Short-Term HODLer Market Value To Realized Value Ratio
Short-term HODLer MVRV
The short-term HODLer market value to realized value ratio has dropped significantly from where it was in early January. While market capitalization takes the market price of bitcoin and multiplies it by the total outstanding supply, realized cap takes the price of when the coin last moved into account in the calculation. When you take the ratio of market cap by realized cap, it gives you MVRV, and in this case, it measures UTXOs (bitcoin) that moved less than 155 days ago. This metric can give you a sense as to whether the market is above “fair value” in terms of the short-term price action, which is being driven predominantly by speculators in the derivative markets over the last few months.
Short-term MVRV trending lower is very bullish and should give investors confidence the lower it creeps down, that the next bitcoin run up is closer than ever.
Despite months of choppiness in price action, the long-term outlook has never been more bullish, and events such as a legendary Wall Street investor calling for the dollar to lose reserve currency status doesn’t even get the top mention of the week.
Continue to stack your sats friends, or someone else will.
"Ponzi scheme" has become a byword for all manner of financial frauds and monetary scams. When a rapid six month collapse erased $2T (trillion) from crypto market capitalization in 2022, mainstream media outlets were quick to again label cryptocurrencies, including Bitcoin, Ponzi schemes.Writing in the Chinese People's Daily online edition, Shan Zhiguang and He Yifan
Only bitcoin offers a truly sustainable path forward for the continent which prizes this attribute.Recently we have been tragically exposed to a thought process of one Eero Heinäluoma, a Socialist member of the European Parliament. While it doesn’t seem like there’s actually any proposal to ban bitcoin mining at this moment, it’s safe to assume…
According to an official statement published on February 25, 2019, Bitfinex has revealed that the United States government returned 27.7 BTC (worth about $105,000 USD) to the exchange, as part of restitution for a hack that was effected on the exchange back in 2016. The returned tokens represent just 0.023 percent of the bitcoin stolen…
This is a promoted article provided by Mazer Gaming. Mazer Gaming, an esports and entertainment organization, has just announced the second edition of its popular Mazer Gaming Gives Back tournament series. Last May, Mazer Gaming hosted their first crypto-infused charity tournament, partnering with The Giving Block to raise money for Us4Warriors in crypto donations. This…
The Freedom Convoy has resorted to bitcoin donations after GoFundMe shut down its initial fundraising campaign.Freedom Convoy, a cohort of Canadian truckers protesting for the end of COVID-related mandates in the country and the restoration of the Canadian Charter of Rights and Freedom, had received C$10 million ($7.8 million) in donations until its fundraising platform,…
The nomenclature used to help the layman understand Bitcoin makes lawmakers confuse it as money instead of entries in a database. We must change the terms.This is an opinion editorial by Beautyon, the CEO of Azteco and a contributor at Bitcoin Magazine.A group of bitter, twisted computer illiterates in the beleaguered European Union have managed…
A deep look into Celsius network's design and the events of recent weeks with its yield-generating strategies that culminated in a halt of bitcoin withdrawals. The below is a free, full excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and…
Volatility thrives in market uncertainty and comes out the most in bear markets. It helps to examine the volatility conditions throughout past cycles. The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market…
Crusoe, a data center company dedicated to mitigating gas flaring, is reportedly seeking a loan to expand its bitcoin mining operations.Datacenter firm Crusoe Energy Systems is sounding investor interest for a loan to expand its bitcoin mining business, Bloomberg reported.The firm is seeking a $100 million to $125 million debt deal backed by Crusoe's bitcoin…