Bitcoin Set a New All-Time High, Now Altcoins are Soaring | Santiment Weekly Pro Report

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brianq
Oct 26, 2021


In the ever-changing crypto market landscape, Bitcoin hits an all-time high just five days ago, and already appears to be getting forgotten about in favor of altcoins once again. In this edition of Santiment's Weekly Pro Report, we'll take a look at where things sit for Bitcoin as always. But we'll also dive into the altcoin market landscape and discuss the driving force behind dog-related meme coins, NFT coins, and what kinds of green, yellow, and red flags you should have in mind.


Bitcoin's Utility, Dormant Movement, and Whales


Address activity and circulation continue to be two of the primary metrics to indicate whether utility is keeping up with price, and as you can see from the faint 30-day trendlines, BTC continues to recover on the on-chain side of things:

As address activity continues to visit above 1M addresses at a fairly regular rate now, it's a great indication that addresses are continuing to interact with the BTC network on an expectedly regular basis to justify prices.


Meanwhile, another great predictor we continue to see great alpha from is the 30-day MVRV metric. If you've checked out our This Week in Crypto shows, you've seen us note that average trading returns above 15% in a 30-day span is generally what's considered to be a "danger zone"


Currently, Bitcoin is sitting at about halfway to that danger zone mark, which is a mild concern. But with the drop in trading returns occurring after the $67k all-time high threshold was broken last Wednesday, traders could very well rebound back into the 15%+ MVRV territory before the next pullback actually occurs.


Mean dollar invested age is a metric we only pay significant attention to when it's showing signs of a turnaround. When the tan mean dollar invested age line begins to show a dip, it means that the average age of fiat currently invested in Bitcoin is getting younger due to older dormant coins moving:


Currently, this mean dollar invested age is seeing its most extended drop in age since March, with 3.3 days dropped in just the past week. In most historic bull runs, an extended dip in mean dollar age is a primary indication that markets can and will be able to thrive due to previously inactive addresses finally beginning to circulate large amounts of tokens.


Whales are always an important trading group to keep an eye on, considering their influence on prices. For Bitcoin's addresses holding between 100 to 10,000 BTC, the amount being accumulated right now continues to edge up:

In the past two weeks, these whale addresses have added 0.19% of BTC's supply to their wallets, instilling a degree of confidence that prices will continue to rise. Their 49.49% of Bitcoin's supply held is the largest amount held in 8 years.


Transitioning into the rest of the crypto markets and altcoins, one of the key topics we've touched on are the dog-related meme coins and their surging prices. Regardless of what your stance is on these tokens and how 'seriously' we should take them, their price surges have been undeniable. One thing we touched on was their volume and social dominance patterns, and how when both of these metrics get high, prices tend to correct:


Meme Coins & Derivative Data Show How Crowd Sentiment Continues to Predict the Future of Altcoins

Until the hype begins to cool down for coins like DOGE, SHIB, and ELON, it's worth watching how the crowd continues to pump and dump these highly speculative coins with little to no development backing their prices.


Another thing we have been focusing on is the rising funding rates on popular exchanges like Binance and our new FTX exchange data. Unsurprisingly, with Bitcoin's all-time high and many altcoins beginning to emerge as big price gainers, the amount of longs on large exchanges are beginning to climb overwhelmingly higher compared to shorts. Check out the spikes in many of these top 30 assets as funding rates have turned positive over the past two weeks:


As we can see in the three charts above, each group of 10 top market cap assets is seeing its third largest surge over the past six months, in terms of longs paying shorts on Binance. This implies that there is some greed and increased risk occurring by traders right now. And yes, this even includes Bitcoin's long/short funding rate. So consider this a yellow flag.


In the case of the crowd beginning to doubt a sustained Bitcoin rally, we often like to look at the frequency of the word "short" being mentioned throughout many conversations we track across five different platforms:


When dominance spikes (in orange) occur, it often leads to traders who are taking profit or beginning to short, getting burned. As we have said many times in our analyses of the markets, crypto generally moves in the direction that the crowd least expects it to.


For now, though, it appears that "short" callers aren't being particularly vocal, which certainly isn't a terrible yellow or red flag. But it also means that any crowd doubt isn't going to be fueling the markets any time soon. Prices pushing higher appears to not be correlated with social behavior from the crowd currently, and more-so rising utility and whale accumulation for many assets.


NFT and DeFi Assets Aren't Showing Signs of Slowing Just Yet


Finally, due to the overwhelmingly impressive returns we continue to see from the NFT and DeFi sector, we've done a quick analysis to confirm that the majority of assets continue to be increasing in value from them.


NFT's had another great week, led by Ethverse and Chain-guardians in this illustration of largest weekly gainers from highest to lowest. If you have been invested in an even spread of all projects highlighted by our NFT watchlist, you'd have come out well ahead once again, as the NFT phenomenon continues to gain traction in the cryptoverse:

And the DeFi asset watchlist continues to look solid as well. Some of the top projects in DeFi, such as Luna, Thorchain, Curve, and Safemoon, continue to heavily incentivize traders to remain confident in the larger cap options. See the last 7 days of performance, sorted by largest to smallest market cap:


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.

BTCLUNADOGESHIBELON
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brianq
Oct 26, 2021

Thanks for reading!

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Bitcoin logo

BitcoinBTC

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$ 70.70

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$ 0.000037

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Dogelon Mars logo

Dogelon MarsELON

$ 0.000001

26.14%in last 7d

Conversations (1)

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<email hidden>

1 month ago

Love your work mate, it would be great to get a score for bullish vs bearish as a percentage using multiple indicators. something similar to this fear greed index but using your own metrics in a weighted manner example: https://alternative.me/crypto/fear-and-greed-index/