The Market Chessboard: Strategic Moves in a Volatile Crypto Landscape ($BTC & $ETH)

Welcome to this edition of the OnChain Edge newsletter, where we'll be diving into the latest market developments, technical analysis, and on-chain metrics. As the S&P 500 and Nasdaq Composite face critical resistance levels, we closely examine the interplay between currency and equity markets. We'll discuss the recent volatile movements, particularly in Bitcoin and Ethereum, and analyze key on-chain metrics.

Whether you're a seasoned investor or new to crypto, this edition will provide valuable insights and help you stay focused on the bigger picture, ensuring you make informed decisions amidst market turbulence. I also have an exciting list of altcoins that smart money is buying now, which I think you will find interesting. So please sit back, relax, and let's dive in!

Enjoy!

Onchain Edge

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Global market

The S&P 500 has faced multiple rejections from the critical resistance level of $4,171 since last week and is now trading at $4,106. Each attempt to breach this threshold increases the odds of a breakthrough.

The Nasdaq Composite (NDX) also faced rejection from the significant resistance level of $13,015 and is currently trading at $12,725. Therefore, the upcoming monthly close will be an essential factor to consider.

A decisive monthly close above or below key resistance levels could signal the market's forward direction.

The US Dollar Index (DXY) has broken below its grey support zone and is currently trading at $101.3. This suggests a higher likelihood that the rally in other markets may continue for some time, as a weakening dollar typically boosts asset prices.

The dollar has begun to weaken, yet stock indices encounter formidable resistance levels. This dynamic reflects the complex interplay between currency and equity markets.

Technical Analysis

Global market cap with BTC

The global crypto market is currently valued at $1.157 trillion following a significant drop, which places it at approximately the same level as last week. As mentioned, I anticipated the market to retest the lows, but the speed at which it occurred was unexpected.

Consistent with last week's outlook, I remain primarily interested in seeking long positions in these markets.

128-week moving average at $1.35 trillion is still an essential target for the midterm. The only caveat is the 3-day engulfing candle with a slight bearish bias. However, it all depends on how the next few candles close.

Global market cap without BTC (USDC + USDT caps removed)

The altcoin market has retraced its gains from last week and retested the $500 billion support level. Currently, it stands at $489 billion, having broken below the crucial $500 billion mark and revisiting the month's low.

The altcoin market must break above this threshold for the rally to continue. In addition, the month's low is now acting as support and must hold for the market to maintain a positive outlook. With these factors in mind, it is essential to keep a bullish bias for the moment and monitor the market closely for any significant changes.

BTC technical analysis

Given the high volatility in the crypto space, it's crucial to adapt the analysis accordingly. The best strategy in such conditions is to take advantage of price dips and avoid getting shaken out by the volatility. Recently, due to some fake news, Bitcoin (BTC) experienced a sharp drop from $30k to $27.2k.

In the short term, we may see some sideways movement and a retest of the accumulation range before breaking above the $32k level. Monitor the market closely and maintain a flexible approach to capitalize on potential opportunities arising from these volatile conditions. Sometimes you can’t plan for the volatility if you are new to the space. Welcome to crypto.

Ethereum TA

Ethereum (ETH) experienced an extremely volatile day, with a wick reaching up to $1,962, marking a new weekly high, and another wick hitting a new weekly low at $1,788 within the same day. Currently, ETH is trading at $1,856, and the daily candle close will be crucial in determining the market's direction.

Since one of the factors contributing to the dip was partially driven by fake news and $BTC being sold by the US government, we might witness a few recovery candles in the near term.

On-Chain Analysis

BTC on-chain analysis

BTC is trading at $28,835, representing a -1.43% decrease since last week. Based on the given data, the cryptocurrency market is currently in a relatively stable state. The RSI value of 54.5 suggests that the market is neither overbought nor oversold, as it lies between the 30 and 70 thresholds. Furthermore, the Puell Multiple of 1.05 indicates that the miner's revenue is neither significantly increasing nor decreasing compared to their cost, suggesting that the market is neither overpriced nor undervalued.

The NUPL value of 0.3 shows more profit than loss investors, indicating a positive sentiment in the market. However, this value is still relatively low and does not imply excessive selling pressure. Finally, the MVRV value of 1.42 signifies that the market is moderately valued, greater than 1 but less than 2. This means that if all holders were to sell their coins at the current price, they would, on average, generate a profit of 1.42 times their initial investment. In summary, the data suggest a reasonably balanced market.

BTC on-chain metrics

The Puell Multiple has experienced a significant decline since last week and is currently at 1.05. However, it could not break above the downward trending resistance mentioned previously.

As the Puell Multiple decreases, it presents increasingly attractive buying opportunities for Bitcoin (BTC).

Trade Idea

Here’s a screenshot of the tokens bought by successful cycle traders in the last 3 days. A lot of the tokens are shitcoins. However, I’m happy to see $ARB, BLUR, LVL, FXS, and RPL on the list.

Now with the drop that happened, you will have a lot of good entries into coins that pumped earlier today.

Conclusion

The market is going through some wild swings right now. If you're in it for the long haul, take a step back and consider your long-term goals. I know it's tough not to get emotional when you see your portfolio taking a hit, but trust me, most of the time, it's better to focus on your exit targets and not get caught up in the daily ups and downs.

Remember to focus on the big picture and not let short-term market noise sway your decisions. Instead, keep your eyes on the prize; you'll be better positioned to reach your investment goals.

Cheers,

Onchain Edge