Has Bitcoin hit the bottom yet…?

While the market is still in a recovery state dealing with the voyager, celsius, and 3AC trilemma of insolvency and bankruptcy, some analysts believe that this relief pump is just a bear market rally and the bottom is not in while others have a conviction of a beginning of a new bull market cycle. Let's deep dive into some quant analytics data from the CryptoQuant platform and decide yourself which side you would pick on. Also, you can check out our previous articles from these links: Exchange Listings, Bear Market Analysis, and The Ethereum Merge Guide.

Since January 2021, Miners' reserve had been gradually increasing as miners were reluctant to sell their BTC rewards which they were earning for mining blocks. But recently, the graph has started to come down quite sharply. Considering the fact that moving coins cost fees, miners' wallets send mined coins or purchased coins outside for two possible scenarios: moving to the exchanges for possible selling or internal wallet movement for trading or possible security reasons. 

Miners' Position Index (MPI) is defined as the ratio of the number of all miners' outflows in USD divided by 365 days moving average of it. Unlike Miner outflow, MPI takes the average behaviour of miners into account by using a 365-day moving average. Also, MPI explains the relative miner's liquidation behaviour compared to the historical average, assuming that most outflows from miners are heading to exchanges for selling. The recent spike in MPI may suggest that a lot of BTC miners have exited their position. The technicals behind this could also mean that if the price was to sustain above the 20k level, it may mean that miners' capitulation has occurred, and there is a decent possibility of reaching the 28-30k target suggested by our analytics team at TDMM.

You may have heard ‘’follow the smart money” but with this chart, we can definitely point out the on-chain occurring whale activity. From the Spent Outputs Value Bands, whale activity" can be tracked based on the transaction volume moved over a short period of time. Modifying the chart for 10K BTC and greater, we can determine the exact moment when large movements occurred on the network. As one can see, there has been no significant activity in the whale wallets since the early July dump, and even in this squeeze-up, the whales are still hibernating and may be waiting for the right time to hunt.

A Twitter user who goes by the handle @Minkyutekken posted this chart of BTCUSDT with the 15MA and 40MA Taker Buy Sell Ratio indicator. One can garner from this chart that whenever this indicator made a top above 1.02, it was actually an excellent time to dollar cost average (DCA) and just ride the market. And when it fell below 0.98, it was the optimum time to slowly scale out of this market.

 Another guy @DanCoinInvestor on Twitter posted the chart of the realized cap of UTXOs’ age bands. This indicator summarizes the capitalization held by long-term and short-term holders. It’s a good practice to watch out for shifting distribution in the UTXO Age Band as price rises/falls to further gain insights on the market through analyzing its participants. In this indicator, realized capitalization of wallets holding BTCs for more than 6 months is denoted. When the market enters a bear market, from then on, they start to accumulate BTC little by little. The current level of this indicator coincides with the other peaks and is likely to be the indicator top which could imply that maybe the bottom is already in.

Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap. Assuming that the latest coin movement is the result of a purchase, NUPL indicates the total amount of profit/loss in all the coins represented as a ratio. Value over '0' indicates investors who are in profit and an increasing trend in value means more investors are beginning to be in profit. Value under ‘0’ indicates coins or investors who are in loss are more than investors that are in profit. The price has just started to get above the 0% level and may indicate that capitulation has already occurred.

Adjusted Spent Output Profit Ratio is calculated as the USD value of spent outputs at the spent time(during selling) divided by the USD value of spent outputs at the created time(during buying). Values over '1' indicate more investors are selling at a profit. Values below '1' indicate that more investors are selling at a loss. HIstorically value below 0.9 is the indication of bottom formation and as we can see we have hit those levels and gotten back up which could mean that the bottom may already be in.

Now, while our analytics team at (TDMM) believes that the crypto market needs some more innovations for new money to flow into it and the much-needed bull cycle will come from the inflation cooling off and the FEDs relaxing the monetary policy and interest rates, the upcoming weeks would be a crucial time as the price decides which side to further unwind.