The current bear market demands the skill of ‘Tsujigiri’. Well, if you are an investor or trader thinking ‘life’s but a walking shadow’, then familiarize yourself with the belief of renowned American investor Jim Rogers –
“The bottoms in the investing world don’t end at four-year lows, they end at 10-15-year lows.”
Now, this quote may sound like a minor myocardial infarction. However, know that bitcoin holders really don’t have to worry as positive sentiments are pouring in for the king coin area. It is important to note here that emotions rule the business world.
And, you ask, how can one measure it. Well, the ‘social dominance’ on-chain metric can tell a lot about the tension of profit per unit traders and the overall sentiment in the market as a whole.
Interestingly, over the past two years, the market has seen the social dominance value of BTC drop below 20% as the altcoin craze was in full swing. But, surprisingly, Bitcoin’s social dominance is over 25% this week.
This is indicative of the fact that the crypto-mob has a “healthy” outlook on bitcoin in general. Furthermore, it clearly shows that more than one-quarter of all discussions in crypto-forums are related to the king coin and not altcoins or stablecoins.
At this point, it would not be foolish to ask how positional traders can profit from the reading of this metric. No one needs to ‘go figure’! Taking a look at the loaded spirit should be enough.
The negative sentiment after June 6 has been corrected. It is currently at -0.069 mark. The probability of it going into the positive zone is zero at the moment. Positional traders looking to go short can take advantage of this opportunity.
However, traders seeking verification from whales will be happy to know – according to a data platform tokenview – Bitcoin’s third largest whale increased its stake to 565 BTC on 23 June. The address currently holds a total of 129,936.54 BTC, with a total value of approximately $2.6 billion. This is when the overall market is currently considering the $20k+ level as psychological support.
Here’s a painful reminder – the king coin reached its most recent local bottom on June 18 at $17.8k. You can blame inflation, the FOMC-related rate hike, COVID-19 or the Russia-Ukraine conflict.
That being said, the reading of the MVRV (30-D), however, raises little hope. At press time, MVRV had rallied from its recent low of June 18 at -13.17%. However, the metric still suggests that BTC is undervalued. Here, it is worth noting that this metric is aimed at recovery.
Considering the addresses bought between $17,392.68 and $23,662.11, there are 1.28M addresses in profit. However, only 826.63k addresses are ‘out of money’. This is certainly not a depressing figure.
Considering all the minor bullish factors of BTC, one can expect the ‘Bitcoin catharsis’ to come to an end. But, let’s not forget that it may take a few years for this to happen.