Big news coming out of El Salvador today as their congress has approved Bitcoin as legal tender and plans to hold at least $150 million in reserves.
The historic news has started a new trend amongst government officials around Latin America to go public in support of Bitcoin. It appears there is very strong demand to release the shackles of the USD hegemony.
If some how you can’t see how big this is for the people of El Salvador check this out…
In addition, MicroStrategy is at it again with another private offering to acquire Bitcoin. Originally, it was announced the offering would be for $400 million but was quickly increased to $500 million after a reported $1.6 billion in interest for the secured notes.
Personally, my favourite piece of news coming out of the Bitcoin conference was Square announcing they’re considering making a hardware wallet for Bitcoin as well as teaming up with Blockstream “to launch an open-source renewable energy mining project as part of our Bitcoin Clean Energy Initiative.”
Jack has continuously shown his strong conviction for Bitcoin and is certainly someone the community can rally behind. Kudos Jack!
Aside from this, China still looks to be cracking down on Bitcoin mining as miners move out of the country. Overall this is a net positive for Bitcoin as it removes any FUD regarding the CCP using Bitcoin as a monetary weapon.
Let’s get into some metrics…
Net Unrealized Profit/Loss is the difference between relative unrealized profit and relative unrealized loss. We topped out right before the Euphoria stage on the latest run-up. Looking closely it seems each cycle has topped out a bit lower which makes this chart look bearish currently, unless this cycle is similar to 2013.
June 7th saw a massive outflow of Bitcoin off of exchanges. This is bullish behaviour amongst hodlers as strong hands buy up liquidity from weak hands.
If Bitcoin did put in its top for this cycle then MVRV was one of the only metrics to call it when we touched the red zone.
Market Cap to Thermocap Ratio has retraced closer to buy territory on this latest correction without touching the redzone this cycle. This could mean that this metric has either broke or the cycle isn’t over yet (2013).
Bitcoin Difficulty Ribbon is an indicator that uses moving averages of the Bitcoin mining difficulty. During periods of compression have been good buying opportunities in the past.
aSOPR is telling us investors are currently selling at a loss overall. This is a bearish signal until we get back above the black line and it turns into support.
SSR shows us the stablecoin buying power compared to Bitcoin supply. A lower SSR is telling us there is more stablecoin supply on the sidelines. SSR has been dropping quite significantly as investors began to sell in May. There remains lots of dry powder ready to enter back in when market sentiment changes.
All in all this cycle has thrown everyone for a loop. Lots of new dynamics. New entrants have included large hedge funds, public companies, and now countries. What a time to be alive!
In the news…
If you’re interested to learn more about crypto trading, macro analysis, and on-chain metrics, you can get a free intro course and access to a crypto chatroom run by my friends at Bulls on Wall Street.
Resources I Use
I use Glassnode for all the metrics I track on the Bitcoin network. Their platform is extremely user friendly and fun to use.
Binance is the main exchange to trade the crypto markets.
Coinsquare offers Bitcoin trading in Canadian dollars and is one of the top exchanges in Canada.
I use Tradingview daily to analyze trading charts and find areas of support and resistance.
I use TokenTax to calculate my crypto taxes at the end of the year. They plug in directly to the exchange you use through an API. After you get the full report you can send it to your accountant or have their accountants finalize everything.
Nothing in this article is investment advice. I’m not a financial advisor. Do not make investment decisions based on what is in this article or any other article written by BTC News or Blockedia.