Dear Teroxx Community,
This week we saw a digital asset market which experienced resets that put most digital assets back to December 2020 levels.
Weekly overview
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
As if set by the clock, the ongoing crash of the crypto market has once again brought on the old familiar “Bitcoin is dead” style prophecies of doom.
Experienced crypto investors now have nerves of steel, which are also urgently needed in order not to panic and to be able to make objective decisions. It is worth taking a sober look at the on-chain data to find out whether it is time to buy or sell.
The bitcoin price is currently close to the 200-week MA again, although the mark was already undercut in the meantime on June 14. Although further losses cannot be completely ruled out, the history so far gives hope that the dwell time below the important moving average is usually only short.
The last time BTC slipped below $24,000 was in December 2020. At that time, the $21,900 mark stood out as a crucial support. Thus, in the long run, this level should serve as support when the market makes positive moves.
The last important ratio that gives hope and could indicate that Bitcoin might be in a favorable buying opportunity is the so-called Market-Value-to-Realized-Value Ratio (MVRV), which currently has a value of 0.969 points. In recent years, the value has rarely been below 1, which makes it clear that Bitcoin is currently very “cheap” in relation.
Both the Fidelity chief analyst and an important crypto-influencer say that the actual market value of Bitcoin is currently significantly higher than the price value.
Jurrien Timmer, the director of macroeconomic analysis at influential asset management firm Fidelity, concludes that Bitcoin (BTC) is clearly “too cheap” right now.
As the financial expert explains on Twitter, the current crash of Bitcoin is also accompanied by a downturn in the so-called “price-to-network ratio,” which is now as low again as it was last in 2013 and 2017. According to Timmer’s interpretation, this is a possible sign that the market-leading cryptocurrency is currently undervalued. Finally, the knowledgeable analyst further underlines his assessment using the Dormancy Flow metric provided by Swiss crypto market research firm Glassnode, as this in turn indicates that Bitcoin is “oversold.”
The dormancy flow is a much-cited indicator to derive the market value of Bitcoin by putting the price and buying behavior in relation to each other.
“Crypto is simply another technology. It depends on how you use it. It can be used for good or for bad. From our perspective, it offers massive opportunities,” said the director of the UN’s International Computing Center. The United Nations is enthusiastic about distributed ledger technology (DLT). In an interview with Cointelegraph at WEF 2022, United Nations International Computing Centre (UNICC) Director Sameer Chauhan spoke about the “massive opportunities” he sees in cryptocurrencies, saying, “It’s a tool. You can use it for something good or for your own profit, which is also not a bad thing. […] In the future, cryptocurrencies will be an important part of how the world interacts and transacts, and will make for a more balanced environment.”
Technical term of the week
Support indicators: Are price levels that historically can serve as support. These are usually support zones of past days or moving average lines with large time frames (200 days or more). These often provide useful buyback points for digital assets for dollar cost-average entry.
Digital asset market
These setbacks caused Bitcoin to slide to December 2020 levels. Thus, the $20,000 level was pierced to the downside and support was established at ~$18,000. This negative trend cannot be explained “chart-wise” but is a result of global financial market developments. Due to the global uncertainties, the interest rate hikes by the FED and the opaque outlook for the near future, investments are faltering.
After successful support formation, there were cautious attempts at an upswing, which is currently still continuing. Thus, a first stabilization can be observed. Last week, capital protection was thus the most important component, this week we expect increased volatility, which could favor entries.
Bullish outlook: If the markets complete a bounce, $25,000 could be attacked as the first major resistance.
Bearish outlook: If the sell-off continues, Bitcoin could slide back towards the support zone at ~$18,000.
