UFO - Chasing pumps don't end well
Assets covered: UFO
Metrics used: Trending words, Supply on Exchanges, MVRV 7D, Active Deposits, Network Growth
So "ufo" made it to the #1 spot on our trending words page, where it has historically shown that prices generally take a dip shortly after.
UFO's Network Growth have been rather consistent in identifying local tops for the past 3 months now. Each time there's a spike in Network Growth after a Price rally, the price tends to correct.
We have now seen the most intense spike in Network Growth for the past 3 months as new folks jump in to chase the biggest rally so far.
Once Network Growth topped out, so did the price as there's no new market participants to prop up the price. Things are in freefall now and new community members are made.
Supply on Exchanges
Looking at the past 3 months of UFO action, seems like it has gone through a Distribution phase (rising supply on exchanges, falling prices) and Accumulation phase (Falling supply on exchanges, rising price) before marking up strongly for an exit pump.
The recent rally saw a sharp spike in Supply on exchanges, which marked the top nicely as folks look for liquidity to exit their positions. There also appears to be some latecomers looking to sell near the recent bottom.
There was a decent amount of Active Deposits that capitulated in June's bottom and since then, every price rally saw increasing amount of Active Deposits.
Eventually we saw the highest spike in Active Deposits at the recent top, indicating that many folks got the chance to exit at a very price. Not bad indeed for an exit pump.
UFO's MVRV 7D which measures the short-term profit/loss of holders is showing that we are in a somewhat neutral zone after bottoming out in the opportunity zone.
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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