Bitcoin On-chain Analytics | BTC, ETH, XRP, MATIC, AAVE Ideas
Hello and welcome, everyone. It's Martin here with CryptoGains. Today we're focusing on on-chain analysis on Bitcoin just to try and understand what's going on in the crypto market. First of all, we're beginning with this price drawdown from the all-time high. And we can see that as long as the drawdowns from the all-time high remain below 30% — like in this primary bull run that we witnessed from January 2017 to about January 2018, about 365 days — this is a good guide for an average duration of a bull, and that was about one year. And we can see that we hit many drawdowns, but the bull run was still intact. And the current situation suggests that we are only 200 days in a primary bull run, and we're experiencing, once again, a similar drawdown approaching 30%, which on the one side can be argued as something healthy and something signifying more significant consolidation, giving people an opportunity to enter into this bull run and ride it towards its conclusion.
Interestingly, what we can also observe, however, is that the Entities in Profit has dropped quite substantially to 77%. In this case, it only happened a couple of times in the last few years, during the post COVID consolidation, during the 2019 bottom, and in 2016 when there was a Disbelief Rally off the Bottom. Moreover, when we moved to some of the other on-chain charts, we can see that a lot of the short-term holders, or so-called weak hands, have been selling their positions and realising losses.
And now, if we take a look at another very important dynamic, we can see that a large percentage of the overall supply of Bitcoin has moved to short-term holders. Although we're witnessing a peak, it is still lower than what we saw during the hype at the end of 2017, but the pattern on the left is very similar to the panic-selling, which ensued at the beginning of 2018 and led to a very significant drop in Bitcoin.
Finally, if we take a look at the balance on exchanges, we can see some very significant exchange inflows, suggesting that probably some Bitcoin is being moved to exchanges in preparation to get sold. And this indeed seems to be the case on an exchange like Binance, which is mainly for non-US traders and investors and where a lot of the speculation is happening.
However, conversely, if we take a look at the net balance on Coinbase, which is the platform that most institutional investors use for trading, we can see that the picture is quite different, and there are mostly outflows where institutions buy Bitcoin and then take away to wallets for storage. So let's now move to the technical charts and see how we can trade some of these insights.
Bitcoin pretty much unchanged since yesterday. $45,000 remains the critical level at which to initiate long positions, with targets at $45,800 and $46,400. Conversely, below $45,000, selling Bitcoin, and the targets are $44,000 and $42,200 on the short side.
Now we're moving to Ethereum, which is holding a bit better but still expressed quite a substantial correction. The pivot point for Ethereum is $3,445. Above that level, buying Ethereum, we can see that the nearest resistance on the long side counts at $3,560 and then $3,630. Conversely, if we break below $3,445, we could see further declines taking us to the next levels on the short side, which are $3,380 and $3,200.
And now we're moving to Ripple. $1.545 is the critical pivot point for Ripple. And, above that level, we have the next resistance at $1.60, which is a good take-profit target. Then we need to zoom out quite a bit to see the next reasonable take-profit target, which is going to be $1.65. Conversely, if we fall below $1.545, we could see declines to $1.51 and $1.46.
Now we're moving to two very strong performers of the last few days. First of all, we have Polygon. Starting with Polygon, Polygon rallied to a new all-time high, and I'm using a Fibonacci extension to get my entry points and critical levels, but to me, as long as we're above $2.07, there are good opportunities to buy Polygon, with the first target at $2.15 and then the 2 Fibonacci extension level sits at $2.315. So that's going to be a reasonable target on the long side. Conversely, we can see the top of the critical levels based on the mathematical model are going to sit around the level of $2 and $1.89 on the short side, which is also the previous all-time high if you decide to sell Polygon below $2.07.
And finally, let's take a look at Aave, which is also related to Polygon and is performing exceptionally well. Once again, I'm using Fibonacci levels for this analysis. And here, the pivot point is $643. Above that level, I'm seeing good opportunities to buy Aave, with the first target at $660, the all-time high, and then $678, which is the 1.272 Fibonacci extension level. Conversely, if we break below $643, we could see declines, first to the Fibonacci level of 1, which is around $634 and then $620, which is the next reasonable support area.
These are all the ideas for today. Thanks for joining me. Keep learning with the video education section and the CryptoGains Market Insights subsection. Remember to join the Crypto Signals Made Easy channel for a lot of insightful articles and trading ideas.
Also, next week I'll be running a crypto webinar on Thursday at 7 pm UK time, 8 pm Central European Time, and I'll be sharing more information on that in the description of the video. Trade wisely, and I'll see you soon.