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On-chain : Analyzing The Most Dramatic Sell-offs in Bitcoin History

31 May, 2021 Martin Petkov
Analyzing The Most Dramatic Sell-offs in Bitcoin History

Hello! Welcome everyone! it's Martin here with CryptoGains, I hope you had a good weekend and you were able to join our crypto webinar our last week, which received amazing feedback from all people who attended. Thank you to everyone who attended that webinar. We made it really special for me, having that degree of feedback and interaction throughout the live session was hugely helpful, and of course, the feedback suggests that it was very helpful for the people who attended it as well. 

But now let's dive in and take a balanced look at what is going on with the market with some insights from Glassnode. What we witnessed last week, and to be specific, on May 19, that was actually two weeks ago, was a very significant event called cpitulation, very significant drop, totaling 47.3% or 28,136, in terms of volume in the Bitcoin price. So let's explore some of the charts and see what's going on.

First of all, we have the Bitcoin grayscale premium, which typically is a good indicator of the health for institutional demand for cryptocurrencies, and we witnessed the truth about 23rd of February, the grayscale Bitcoin trust started trading at a discount, signifying weakening institutional demand, and it reached a lowest point of minus 21% which was just when the big sale started accelerating and then that discount started recovering, of course because institutional demand started picking up again to take advantage of these temporarily lowered prices. 

However, we can also witness something quite interesting in terms of the percent bonds on exchanges, which has been in a downtrend for 434 days since the crash that we saw in March 2020. However, I want to draw your attention to the fact that the exact price on the y axis here is fairly narrow, actually trying to find 516 point 5%. So this decline is not as steep as it looks to you, but, actually, it's worth pointing out that it has been decreasing, suggesting that people are moving Bitcoin and other cryptocurrencies from exchanges into their wallets for storage. And now this trend has changed, as people started depositing back to the exchanges in anticipation of a big sell off that we witnessed. 

Also that is confirmed with the acceleration deposits, leading into the sale off. This means that people are transferring money to the exchange in anticipation of selling. Also very similar picture in terms of the fees based for exchanges, as the deposits accelerated and we can see that unfortunately we have very similar pattern to the 2017 - all time high. And currently we are witnessing that the exchange deposit fee has even reached a higher level, or it was 17% in 2017, and now it is up to 20%. Please notice that these are logarithmic scales. So, the current decline in the Bitcoin price is fully, fully reflected here. And if history repeats itself, it's quite possible that we're going to witness a long term stagnation, into the bitcoin price.

And finally, the entity adjusted the Long term holder net unrealized profit and loss ratio, you don't need to understand exactly what it means, but it's worth pointing out that similar to some of the tops in 2011, 2013 and 2018, It's retesting the critical level of 0.75 which has been the make-or-break level. If it breaks below slightly, we're going to start seeing very substantial declines and long term consolidation with a lot of stagnation in Bitcoin. 

So let's move to the charts and see how we can trade some of these insights beginning with Bitcoin. To me 35,600, for Bitcoin 35,600 is fairly robust support, above that level we have good opportunities to see increasing acceleration and upward movement to start at 37 000, and then 38,400. Conversely, below 35,600 we could see declines to 35,000 and 34,250.

And now let's take a look at Ethereum. Ethereum struggled to break above 2,465 And now it managed and you can see with this arrow that we also have a buy signal on StormGain at the moment. To me, the reasonable targets for take profit for long positions here are 2,550 and 2,680. Conversely, if we break below 2,465 once again, we could see the flyers, taking prices down to 2,350 and 2,220. 

Now we're moving to Ripple. The Ripple’s chart is quite similar to where we left it last week, with 1 being a critical make-or-break level: above 1 is a good opportunity to buy Ripple, the nearest target is 1.05, and then, further, another target is at 1.25. Conversely, below 1 we could see declines to 0.94 and 0.89. 

Now we're moving to Bitcoin Cash, the pivot point for Bitcoin Cash is 675 and above that level we have a good opportunity to initiate long positions with target 687 and 718. Conversely, below 675 we could see declines to 655 and 625. 

And finally, we're moving to SushiSwap. 11.1 is the level to look for in SuchiSwap. We are above that level, so the recommendation, of course, is to buy SushiSwap with target 11.6 and then further at 12.3. Conversely, below 11.1 - selling SushiSwap, and, we see that the nearest support areas are 10.1 and 9.6. 

Thank you very much for joining me today, keep learning with the video education section and the games marketing site sub-section and remember to join our Crypto Signals Made Easy channel for lots of insightful articles in trading education. Lots of the people who visited the webinar last week that I hosted pointed out how helpful all the education that we provide is. So keep learning, and you will become more profitable eventually. 

Thanks for joining me today! Trade wisely and I'll see you soon, 

Bye bye!

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