The overall market sentiment seems to be quite good these days. After Bitcoin just tried to break through, the concept of AI+Memes directly caught fire and attracted a lot of attention. A few days ago, everyone was discussing the various topics of big geese, frogs, and goats, and these two days I found that many partners in the group are enthusiastically going to play Memes on APE again. I don't know where this Memes Pump wind will continue to blow in the next few days.
From the operations carried out by the partners so far, the rush to Memes is basically carried out in the following steps:
First is to find the target. Some partners use on-chain tools (such as GMGN, AVE, DexScreener, etc.) to scan the chain, and those with technical conditions may also use programs to scan the chain. Some partners will focus on monitoring the messages in various groups, hoping to get the recommendations and sharing of the group owners or group friends in the first time. Some partners prefer to keep an eye on the dynamics of some celebrities or on-chain meme hunters on Twitter (X).
Secondly, it is to screen the target. Now there are at least tens of thousands of new Memes added to the chain every day, and most partners cannot buy too many, so after finding some alternative targets, they will conduct quality control, such as using the above-mentioned tools or other security detection tools for necessary checks (to see if it is a crypto honeypot).
Then it is to research the target. The main thing is to search on Twitter (X), such as directly searching for the contract address or searching for the topic of the corresponding token.
Finally, it is to trade. Currently, I see that most people are using the OKX Web3 wallet to operate, and some are using platforms like DEXX aggregator to operate, or directly through some Telegram Bots to operate. Of course, some partners, in order to rush quickly, may ignore the security and social platform screening, and directly take action as soon as they find the target (if it meets their own set filtering conditions).
The overall feeling is just one word: fast. If you buy the right one, you can make money quickly, and if you buy the wrong one, you can also zero out quickly. In any case, we still suggest that you can try Memes in small amounts, and at the same time pay attention to anti-fraud (anti-phishing links or crypto honeypots) and do a good job of mental management.
Although the market is unpredictable, many people still like to make some judgments based on different angles. For example, some people will make judgments based on personal feelings, some people will believe what others say, and some people prefer to combine some data or indicators to make judgments... In the previous article (October 19th), we also catered to the needs of some partners, mainly based on K-line and several relatively macro angles to make some basic judgments (guesses). This article is a supplement to the previous one, and we will continue to look at the current market position through some other dimensional on-chain indicators.
1. Continuous accumulation of whales
From historical experience data, whales always buy when the market is weak and sell when the market is strong. For example, they often accumulate during the early stage of a bull market, and then sell during the middle and late stages of the bull market.
Many partners often like to read various news, such as seeing that a certain crypto media/self-media said that a certain whale address has transferred or sold a little BTC, and then these partners feel that the market is going to fall, and it seems that all the whales are selling coins and crashing the market, which is a bit like looking at the sky from the bottom of a well.
In fact, from the overall situation, although there are individual whales who choose to sell their BTC due to panic or other reasons, most whales still choose to buy and hold as the main strategy. In the past 6 months alone, whales (wallet addresses holding more than 1,000 BTC) have accumulated 1.5 million BTC. As shown in the following figure.
From the current on-chain data, the Realized Price of Short-term and Long-term Whales is $27,000 and $63,000 respectively. As shown in the following figure.
And from the Growth Rate Difference, we can also see that the bull market is still continuing. As shown in the following figure.
In addition, BTC ETF funds continue to flow in, and the BTC balance on exchanges is also constantly decreasing (BTC in exchanges is constantly being withdrawn). Moreover, with the reduction of selling pressure from some miners and other entities (such as governments and institutions), it seems that small groups are also accumulating BTC. If this is a bear market, we should not see the above situation.
2. Are retail investors returning?
Compared to the previous bull market, retail investors seem to have much more interest in MemeCoin than Altcoin in this bull market. From the current search attention trend, the interest of retail investors in MemeCoin and Altcoin is somewhat similar to November 2023 (i.e., before the big rebound). As shown in the following figure.
Additionally, there is a more intuitive feeling, such as now the various crypto-related groups seem to be becoming abnormal again, with many groups frequently discussing various MemeCoin/on-chain meme, which feels a bit familiar.
3. BTC.D
Roughly since around September 2022, BTC's dominance has been on an overall upward trend. As shown in the following figure.
If we look at historical data, BTC maintaining its dominance during an upward trend is a good sign, because it indicates that liquidity is flowing into the market, and it will also pave the way for a possible Altcoin season. Once BTC breaks through its previous ATH and starts to run strongly, then theoretically, Altcoins (some Altcoins) will start to catch up and achieve rapid growth.
4. USDT.D
In the previous article about the Altcoin season, we have already introduced the USDT.D indicator, which shows the dominance of USDT and the inflow/outflow of USDT in the crypto market.
Normally, if USDT.D rises, it means that the dominance of USDT is increasing, which in turn indicates that people are starting to turn to a stable preference, suggesting a possible bearish signal. If the opposite, it indicates a bullish signal.
From the current data, we can see that since the bottom in August this year, the total market cap of USDT has increased from $114 billion to $120 billion, while USDT.D has decreased from 6.7% to 5.1%, as shown in the following figure.
This indicates that some of the observing capital seems to be now being used to invest in BTC and Altcoins. If the forecast is correct, when USDT.D drops to the 2%-2.5% level and its market cap exceeds $180 billion, the entire crypto market may reach a new peak again.
Of course, we need to pay attention to not only USDT, but also USDC, as its market cap has been on an upward trend since December last year, which is certainly a good sign, as US institutions prefer to use USDC. As shown in the following figure.
5. Other comprehensive indicators
In addition to the few aspects we have elaborated on above, there are actually many other indicators that can be used to help us make auxiliary judgments, such as those introduced in the previous article, including:
MVRV Z-Score: This is an indicator that determines whether the value of BTC is undervalued or overvalued. From historical data, since 2011, whenever the MVRV Z-score value approaches or exceeds 7, it indicates that the market is entering a frenzy (bull market peak). The current value of this indicator is 1.97, and it reached 3.06 during the period of March 2024, as shown in the following image.
NUPL: This is an indicator used to evaluate the total accounting profit/loss of BTC held by investors. From historical data, whenever this indicator approaches or reaches 75%, it may be time to escape the peak. The current value of this indicator is 52%, and it reached 62% during the period of March 2024, as shown in the following image.
The Puell Multiple: This is an indicator focused on the supply side of BTC (i.e., BTC miners and their income). From historical data, when the value of this indicator approaches or reaches 3.5, it indicates a signal to escape the peak. The current value of this indicator is 1, and it reached 2.44 during the period of March 2024, as shown in the following image.
Pi Cycle Top Indicator: This indicator uses the 111-day moving average (111DMA) and the multiple of the 350-day moving average (350DMA × 2) to identify potential market highs, such as in 2017 and 2021, when the 111DMA moves upward and crosses the 350DMA × 2, it signals that BTC has reached its peak. Currently, from this indicator's perspective, this type of crossing has not occurred, which may mean that BTC has not yet formed the top of this cycle. As shown in the following image.
In addition to the above indicators, there are many other indicators that can be used as auxiliary references. Interested readers can continue to query and learn about them through the data websites in the "Tool" section (reply to the background with the keyword "Tool" to get access).
In summary, if we ignore short-term fluctuations and look at it from a relatively longer time perspective (such as the next 5-6 months), we tend to (guess) that the market is re-entering a new round of the bull market, and it is currently in the middle to late stage of the bull market cycle. This time, Bitcoin has a relatively high probability of a real breakthrough, and it is only a step away from $70,000. At this stage, we still do not recommend frequent portfolio adjustments, but continue to wait patiently and observe the changes.
It also needs to be further explained that although we tend to believe that there may be a new round of bull market opportunities in the next half year, we must also learn to revere the market and manage our positions according to our personal risk preferences, and have an exit strategy in mind.
That's all for this issue. More articles can be viewed through the Talkoutside homepage. The above content is just a personal perspective and analysis, and is only for learning and exchange, and does not constitute any investment advice.
