Bitcoin: good signs vs bad signs

Assets covered: Bitcoin (BTC)

Metrics used: Weighted Social Sentiment, MVRV, Funding rates, Network Profit Loss, Exchange Inflow, Holders Distribution, Circulation

Charts Layout:

We'd like to share few noticeable metrics for Bitcoin today, good and bad.

Good news

1. Social sentiment

Overall retail sentiment seems to have dipped in the past few weeks moving into end of the year:

It's as good as it can look. Seems like many people are quite disenchanted and in disbelief about break above 50k. For whatever reason, the Bitcoin related sentiment is 'mega' down. Possibly a pretty decent sign.


Back into negative, at least slightly:

We could easily drop to 40k and that would be justified in terms of MVRV. But there is plenty of room to the upside as well.

3. Funding rates

Derivatives are not rising:

Funding rate on dYdX is just above breakeven. Very neutral overall on other exchanges.

We could say it's relatively decent looking offchain vibes.

4. Network Profit Loss and Exchange Inflow

We are seeing some NPL dips and EI spikes into price drops:

It means there are people that are immediately 'panicking' about the crash, which is good.

May be they are fixing profits for the year for tax optimization purposes. People selling now because they believe it can dump lower. It's a sign of bearishness. There are enough people that believe BTC will not go higher the whole next year. They sell now because they don't feel confident holding BTC.

Bad news

1. Whales

They are just not showing any signs of strength. Quite a concerning downtrend. Pretty significant chunks of money are being offloaded by these addresses. It's hard to be bullish when whales are acting like this.

2. Circulation

Circulation is continuing to go down:

Every week since November we are seeing a lower high in terms of daily circulation. Amount of Bitcoin being used over the network is clearly declining. So things like NVT ratio are going to be starting to look red.

Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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