Bull run, is only a temporary stop

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Glassnode's metrics show this week that the price decline has broken the distribution phase of the cycle.

In other words, the behavior of traders operating in the short-medium term has returned to levels closer to those typical of a final bear market phase, rather than those that prelude an initial bull market phase.

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This chart in fact shows (yellow curve) the descent of the traders' propensity to spend below level 1, after a peak was reached a few weeks earlier.
This indicates that short to medium term traders have returned to reduce their trades, bringing them to levels typical of an advanced/end phase of a bear market.

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This chart indicates that the btc quote of $53,000 is the threshold below which short to medium term traders may increase their coin sales to cover the costs/losses of their trades.
The yellow curve in fact indicates that the percentage of profitable trades is approaching the continuous straight line, which is the value at which losses and profits begin to equal each other.

What does the above chart mean in practice?

In a net distribution phase, profits from trades fuel further increases in the price.
In this case instead we are still in a phase where the profits obtained in the previous weeks (the peak of the yellow curve in the last green box on the right) have not triggered that virtuous circle making the quote increase.

Summing up: the distribution phase that seemed to start has been backdated to a month ago and now it will have to start almost from scratch.

Important at this point is the fact that, for their part, the holders (investors who hold the coins in the long term) have resumed their phase of accumulation, increasing the deposits of their coins.

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In this graph we can see, for example, that the spending (i.e. the movement of coins that were previously deposited) continues to fall for all the "age" groups of the coins, indicating that the holders are maintaining their deposits and have no intention to make a "panic sell".

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This other graph shows on the other hand the constant decline of the coins held by short-medium term traders.
This figure should be read as a contrast: if traders are depriving themselves of their coins, these coins have to go somewhere. Where? Of course they go to the holders deposits...
That is why I said that holders have resumed their accumulation, buying coins at good price in the market downturns.

Conclusion

The beginning of the bull trend is postponed. Holders have resumed their accumulation (thus avoiding dramatic market crashes), while traders are still timid and do not yet have the strength to trigger a real bull market.

The analogy with the US stock market (see yesterday's posts) is evident.
In both cases we are not yet ripe for a decisive bull trend, but fortunately there are no conditions for the resumption of a bear market. So the bull market will be there, but we still need to be patient....

Thanks for reading.

Posted Using LeoFinance Beta



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