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Daily Bitcoin and Crypto Analysis

Daily and Crypto Market Update: Puell Multiple Shows Clear Path To Higher Prices

October 27, 2021

Justin d'Anethan

Today is a chart day, and we'll look at some interesting crypto data. Don't worry, I've thrown in some news items as well.

While equity markets are hitting new highs, still bolstered by a great earnings season from reporting companies, crypto pulled back slightly on the session. Actually… not so slightly. BTC fell a good 4.3%, from above 63K to now just a tad over 60K.

It's worth noting that on that pullback, the BTC Dominance index fell as well, from above 45 to now just above 44, so altcoins all around gained in relative terms, compared to BTC.

Now, I mentioned some charts:

The first one, and you've seen it before, is the exchange reserves. It's just heartwarming to see them plummet down even at those elevated price levels. This essentially indicates people are keeping coins in cold wallets or other solutions instead of exchanges where they would trade/sell them. So the fact that we're around 60K and people are leaving fewer coins on exchanges is super supportive of higher prices.

Another metric I look at every month is the Puell multiple, relating the daily issuance of newly mined coins and miners' revenue. This is important because miners are the natural and original sellers, so the metric hints at whether we've reached a point where miners will sell to profit or would rather "hodl." You can see green areas where the level is low and red areas where the level is overheated. Right now, even close to all-time highs, we're not even midway to any 'overheated' level, and that's again supportive of less selling pressure and higher prices.

More as a note than a price indicator, I also came across a Kaiko chart showing the correlation between BTC and commodities, including gold. It's fascinating to see them narrow as inflation fears grow and those assets become pricier. In the case of gold, you can see the performance wavering slightly. One could presume BTC is now seen as a better inflation hedge?

Away from on-chain data and trading data, it's great to see two articles pop up in my feed. The first one talks about US regulators looking at how banks could hold crypto assets. This is far from anything becoming a reality, but it is supportive and highlights that maybe the US is happily leading the space, as opposed to China that has been such a detractor.

The last piece of news is Nigeria lifting the bank freeze on some of the crypto firms previously banned. So there, too, the government is looking to be more open to crypto—especially as they prepare the launch of their own currency.

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