tl;dr

The latest update from Glassnode Analytics.

Market Snap

Market Wrap

XRP (Ripple) has been on a tear, rallying over 20% in a day. A favourable outcome, from an XRP perspective, of the court case with the SEC (Securities and Exchange Commission) will be good for the entire crypto market. For disclosure purposes, the CCC Treasury is a late-stage investor in XRP.

With BTC close to 9-month highs, we have $30k firmly in our sights. As leveraged shorts build, with stop losses expected to be around that level, we have the delightful prospect of an increasingly likely short squeeze.

Curious Cryptos’ Airdrop Circular №8

That’s two in a week folks! I do look after you …

Our latest Airdrop Circular was published and distributed yesterday to those who have subscribed to this additional free service provided by the research team here at CCC Towers.

Curious Cryptos’ Commentary — Glassnode Analytics

The latest report from Glassnode contains some very interesting commentary:

https://insights.glassnode.com/the-week-onchain-week-12-2023/

I highly recommend you read the report in its entirety. Just in case that doesn’t happen here is my summary of the key points. Spoiler alert: the opening line is:

“… we will … demonstrate via several methods how the Bitcoin market appears to be shifting gears, out of deep bear market territory, and towards a structure resembling past early bull markets.”

I like the sound of that. You like that sound of that. Read on and enjoy.

…

“On-chain Momentum”

The monthly average of transaction counts hit 309,500 per day last week. There hve only been 627 days in the history of BTC that have seen more activity — just 12.2% of all BTC days. Much like social media, the BTC network is only valuable if people interact with it. Increasing adoption and investor activity raises the transaction count.

New entities operating on-chain have reached 122,000 per day. Only 527 days (10.2%) in the history of BTC have seen a greater number of new entities.

Network congestion has increased leading to significant improvements in the profitability of miners. There is a strong degree of positive correlation between miners’ fees and the price of BTC.

Finally, holders of less than 1 BTC in their wallet, known as shrimps, have continued to grow in proportion to the overall supply of BTC. I know we all have several different public addresses each, but I don’t think you can make an argument that one person will have several shrimp addresses. Feel free to disagree with me if you wish.

“Shifting Up a Gear”

MVRV (Market Value to Realised Value) is a powerful tool for understanding holders’ profitability. At a figure of 1, the entire cohort of holders are breaking even. Greater than 1 indicates unrealised profit, whilst less than 1 indicates unrealised losses.

MVRV is now very close to 1.

Meanwhile, the MVRV Momentum Oscillator is breaking above zero, indicating that a large proportion of the supply was acquired below the current price.

My take on that — and this is not Glassnode’s point of view — is that we seem to be approaching the point of maximum risk for downside price pressure from the weak hands. You will recall that I thought that $25k would be a significant barrier because of weak hands, a view which has been proved decidedly wrong. With unrealised profits building, and an ever-growing majority of purchases in-the-money, the key question is — how many weak hands are left?

This cartoon has been borrowed without permission, to be honest. If you know who I should attribute it to, please let me know.

“Following the Cold Money”

Hot Coins are ones that have transacted in the last seven days. This metric increases when old coins are spent — it can be viewed as a proxy for the motivation of long-term holders to take profits. Though the number of Hot Coins has increased slightly in recent days, it remains close to cycle lows. Diamond hands are staying strong.

…

The report concludes:

“Adoption on-chain is accelerating higher, and the majority of coin holders who have weathered volatility for over 5-months remain largely firm handed. Few longer-term investors appear to be motivated to take profits into this rally, signalling a remarkable strength, and a reflection of the beliefs held about Bitcoin’s important role in the future of the global financial system.”

Compliance Stuff

Trigger alert warning.

If any reader feels that they are “literally shaking” (a claim made by a Durham student who cannot cope emotionally — and certainly not intellectually — with a different point of view expressed by Rod Liddle) after reading my commentary, then I can only suggest you don’t read, or don’t shake. It’s up to you.

Cryptos — none of my commentary should be seen as a recommendation to get involved in cryptos. I might be talking complete nonsense without knowing it. Any crypto investments must be viewed as extremely high risk and treated as if they are worth zero until sold.

Stocks — just to make it clear this is not a stock advisory service. The CCC team does not provide financial advice in any way at all. Any reference to asset prices in this commentary is there to simply give context to the commentary and to give colour to the performance of certain stocks related to cryptos.

For the avoidance of doubt, this newsletter is not an incitement to buy cryptos, buy stocks, or even to sell family members in the hope of buying cryptos or stocks.

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