Market Recap | 2021 #47

Dear AbNormals,

We’re seeing a pullback and a relief bounce on different assets. Is it a dead cat bounce or a bear trap? Time will tell 😁

I’ll incoorperate 3 new on-chain metrics into the market recaps

  • L2Beat, a metric that tracks the Ethereum Layer 2 solutions
  • DeFiLlama, a TVL (total locked value) dashboard for DeFi. We’ll use the data to check which protocol or dapps are being used the most
  • CryptoFees, a metric that shows us how much fees is being extracted (aka network usage) from the different blockchains, dapps, protocols

What’s the market saying right now? Confusion πŸ˜•

There have been a lot of FUD about the gas fees on Ethereum, why certain blockchains are better than the other. At the end of the day, people decide what they want to use. The gas fees on Ethereum are skyhigh because people are using it πŸ˜….

Chains such as AVAX and TEZOS for example are marketing that they have cheaper fees. The fees will reach the current levels if they get the traffic of Ethereum so there’s no point in arguing.

Metrics

Let’s take a look at some metrics, I love to take a step back and zoom out to look at the bigger picture. Focusing on the fundamentals and on-chain data has always been my cup of tea, because it filters out a lot of noise

Data Sources

The CBBI is a Bitcoin index that utilizes advanced, real-time analysis of 12 metrics to help us understand what stage of the Bitcoin bull run and bear market cycles we are in. The CBBI is time-independent and price-independent. It simply indicates whether it believes we are approaching the top/bottom of a Bitcoin cycle.

https://colintalkscrypto.com/cbbi/

Bullish

ETH Exchange Reserve

We’re seeing a downtrend in exchange reserves again, whales are buying and withdrawing from the Exchanges into their custodial wallets.

ETH Staking rate

People might be withdrawing from exchanges to stake

Ethereum Layer 2 Deposits

This is the current state of the Layer 2 ecosystem, how much money is flowing into the different Layer 2 solutions.

It has been reaching all time highs every week, people are bridging more and more.

DeFi Total locked value

This handy tool is created by the DeFiLlama team to understand how much money is locked in the DeFi ecosystem.

Ethereum is still dominating the space, but you can clearly see a downtrend. Money is flowing into different chains, this is mostly due to cheaper fees and faster transactions. But those things could mean that the chain is centralized.

BTC Exchange Reserves

The picture speaks for itself, rapid declining of the reserves aka people are withdrawing from exchanges

Bitcoin Miner Position Index

The Bitcoin miners are still hodling since the March crash and has been flat ever since

CBBI – Bitcoin Bullrun Index

The CBBI score is at 59 πŸ”», lower than the previous recaps that we did. A score of 80 would be a level to start being cautious.

Fear and Green Index

We’re at the euphoria level of the market again.

Bearish

No bearish signals at this time of writing

Conclusion

We’ve only seen bullish on-chain data, money is still flowing in and there’s no sign of stagnation.

When I look at the current state of the social sentiment however, there’s a lot of new people joining and a lot of people acting smart. “Investment funds” are popping left and right, but they never show any sign of a strategy or trackrecord. They’re here for people’s money.

“Anyone can look smart in a bullmarket”, always keep this in mind 🧠

What am I doing right now?

Sitting on my hands and waiting for a pullback, I’ve generated a nice amount of stablecoins via RealT. I’ll be ready with my stables to buy cheap when the market drops 🩸


Tip Jar β˜•

If you appreciate the work I’m doing, consider supporting the website 😊

ETH or ERC20: mitchel.eth
BTC Segwit: bc1qqfnfkrnhv903v9v38n98vvk35hgrp77ay7kwqr
BTC legacy: 1DhGZ1kvEF1wamq3oRb4f7pPz3cMBaxKz


Reminders

I’ll list some reminders for you guys and useful articles to help you understand certain topics better.

  • Crypto money flow, always keep in mind that money flows from asset to asset. BTC ~> Mid Caps ~> Low Caps ~> BTC
  • Fear is the mind killer, take control of your emotion and remember that you are the one pulling the trigger. It’s a lot harder than it sounds. This is the reason why you can’t rely on demo account or play accounts, because you’re taking away the biggest hurdle of an investor, EMOTIONS.

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