BTC - Where we are at now?

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Sanfam
Mar 4, 2021

Assets covered: BTC

Metrics used: Price, Social volume, MVRV30D, Funding rate

Summary:

After almost a month long rally in Feb, BTC got its 2nd correction for the year.


Let's see where we are at now.



Price

BTC price - Sanbase

BTC found support around the $44,000 area and have since bounced towards $51,000s before getting rejected.


Volume remains relatively low compared to the past, even when price is rising. This divergence could be a warning that there's not enough participants to prop up the price. In coming days, we would like to see more trading volume else, it's likely for the price to retrace back to where demand is.


So far, BTC is behaving in a similar way as what it did in Jan, where it saw a -26% drop and took almost a month to bottom out. Perhaps we are now in a consolidation pattern before the trend continues sometime in April if history repeats.



Social volume

BTC social volume - Sanbase

BTC's Social Volume is declining since the drop, suggesting the the interest around BTC has waned by quite a bit. In fact, during the run-up, interest levels weren't keeping up with the price, which in hindsight, was a warning.


It's very likely that majority of the crowd got burnt right at the top during the massive liquidation event that saw $4.4B wiped out. As mentioned previously, it'll take some time before they step back in to speculate.



Derivatives cooldown

BTC funding rate - Sanbase

BTC's funding rate remains relatively neutral over the week even though price has risen. This suggests that perhaps the price action is driven by spot buys instead.


No overleveraged shorts that marked the previous bottom is showing yet... there's a rising funding rate suggesting more longs than shorts at the moment, but nothing too crazy.


Generally, the BTC derivatives market have cooled down quite abit and it's a good thing. Will take some time for it to get overheated again, but for now, it's likely that we consolidate.



MVRV 30D

BTC MVRV30D - Sanbase

BTC's MVRV 30D hit the undervalued zone during the recent dump and have since risen but nothing too over valued at the moment.




Going forward

BTC appears to be consolidating for now following the wipe out. It'll take a while before the crowd dip their toes back in and eventually lead to a FOMO (probably when we make a new ATH).


This price action will allow room for ALTs to recover and grow.


...until the support area ($44,000) breaks.

BTC
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Sanfam
Mar 4, 2021

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$ 41003.55

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