Daily Bitcoin and Crypto Analysis

Daily Macro And Crypto Markets Update: Markets Pull Back But On-Chain Indicators Hint At More Upside

November 17, 2021

Justin d'Anethan

It looks like crypto isn’t correlated to traditional markets, at least not during this past session.

With good retail data and earnings from large retailers, investors bought equities, betting on increased consumer spending despite rising prices. We can see the major US indexes closing in the green while gold, the inflation hedge, fell more than half a percent.

BTC was down again yesterday, along with the entire crypto space. After an intraday drop of 8% to about 58K, BTC closed the session 5% down, at just a tad above $60,000.

Alts did broadly underperform but not by a crazy amount. You can see the BTC Dominance index just rising slightly, to now 43.70.

Besides AVAX, which is somehow still rising (about 6%), the rest of the altcoins are down. Amongst the worst performers, we see ZEC down 15%, DYDX down 10%, and STX and VET down nearly as much. Basically, as always, in moments of panic, you’re better off just holding BTC.

For the rest of this briefing, I want to share two charts:

The binary CDD (which stands for coin days destroyed) tracks the number of coins moved off of a wallet (sold in many cases) and considers the amount of time a coin wasn’t moved. If you think about it, it gives more importance to a coin that was held for a long time and is now spent versus coins from a short-term holder. And this provides us with a sense of the time horizon, the market’s psychology, and the cycles. Right now, it looks like there is some spending, which indicates higher prices but not large amounts of selling, which hints at no exuberance and investors holding out for even higher prices.

Second, another chart by Glassnode is the hodl ratio that tracks the number of new coiners and entities that are now loading up on coins versus old coiners that are long-term holders. This also gives us a view of market psychology and whether we’re overheated, if there’s FOMO from many new entrants, or if we’re oversold, and only diamond hand-holders are buying and holding.

Right now, we’re halfway through. This is a good place to be. Prices are undeniably much higher than when we were at 10K or 20K, but it alludes to the fact that we’re also not overheated at the 60K market. There’s still a good way to go.

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