Chief Scientist, Managing Partner at Invector Labs. CTO at IntoTheBlock. Angel Investor, Writer, Boa
Instead of getting into the prediction game, we would like to start the year by presenting some interesting data points that might shed some light into the current state of the crypto markets and their behavior in the near future.
During the last few weeks, Bitcoin has remained steady around the low $7000s. A detailed examination of the data reveals some explanations for that behavior.
1) There are almost 1.7 million Bitcoins between $7000 and $7450
IntoTheBlock’s In-Out Money analysis reveals that this volume of active Bitcoins at those price ranges has made $7450 a difficult barrier to break through.
2) If Bitcoin breaks through $7450, then it will face strong resistance all the way to $8420.
The same analysis shows that there are 2,960,000.00 addresses in the Bitcoin network with positions between $7450 and $8420 which should represents a very strong level of resistance for Bitcoin.
3) The Bitcoin network has remained mostly steady with small signs of growth
We shouldn’t expect the Bitcoin network to suddenly show drastic signs of growth. The last month has shown that the growth in addresses has remained relatively stable as illustrated by IntoTheBlock’s Address analysis.
4) Exchange Inflow and Outflows have remained consistent and highly correlated with price movements
IntoTheBlock’s exchange netflow analysis shows that Bitcoin have experienced both positive and negative balances related to the flow of funds in and out of exchanges respectively.
The top inflow peak happened around December 20th and was the precursor of a price rally in the next few days.
5) Recent order book activity points to stronger sell-side momentum
Order book analysis tends to be very transient but a recent look at Bitcoin’s shows an increasing momentum on the sell side.
This is clearly shown by IntoTheBlock’s Trade per Side analysis that shows an increasing level of activity on the sell side for the last 12 hours for Coinbase and Binance.
6) Ethereum faces tremendous resistance to break through $166
IntoTheBlock’s In-Out Money analysis illustrates that the Ethereum blockchain has over 3 million addresses with average positions between $139 and $162 which should represent a very strong level of resistance for the cryptocurrency.
7) New money is flowing into Ethereum
Is not all bad news for Ethereum, IntoTheBlock’s Traders analysis shows that new funds have been steadily flowing into the cryptocurrency which could be a sign of support for future price rallies.
8) A small rally might push BCH past $140
IntoTheBlock’s In-Out Money analysis reveals that there are only 140,000.00 addresses that hold BCH across a wide spread from $211 to $244. From that perspective, it might not take a lot to push BCH higher.
9) The number of large Tether transactions has remained steady
IntoTheBlock’s large transaction analysis shows that the number of large transactions in Tether have remained consistent between 700 and 1000 moving around $300 USD daily.
This is a strong indicator of the settlement activity in large cryptocurrencies.
10) The Tether network continues to grow rapidly
Despite the stability in the major cryptos, the Tether network has shown consistent levels of growth as shown by IntoTheBlock’s Address analysis.
These are some of the key data points that illustrate the state of the crypto markets in the early days of 2020.
There are many macro signals pointing to an exciting year in the crypto space but the data points to a steady beginning of the year.