Markets on the Brink: The Calm Before the Chaos $BTC & $ETH Market Insights

In this week's newsletter, we will delve into the intricate market dynamics, focusing on the S&P 500, which is currently facing resistance at a critical level, as well as the much-anticipated FOMC meeting that is expected to cause significant market volatility.

Get ready to explore the depths of technical analysis as we dissect the global market capitalization of cryptocurrencies and examine crucial resistance and support levels.

I'll also share exclusive insights into our innovative Onchain Edge Index, which incorporates multiple metrics to assess digital assets' risk and market trends.

Lastly, I'll provide trade ideas for several promising altcoins to keep an eye on, complete with their respective buy areas and potential narratives.

Don't miss this opportunity to gain valuable insights and stay ahead of the market.

Enjoy!

Onchain Edge

https://twitter.com/onchain_edge

Global market

The S&P 500 is still facing rejections from the critical resistance level of $4,171 since last week and is now trading at $4,168. The FOM meeting today will make the markets super volatile.

The US Dollar Index (DXY) and Nasdaq haven’t changed much since last week, so we’ll be skipping it.

Technical Analysis

Global market cap with BTC

The global market capitalization of cryptocurrencies currently stands at $1.02 trillion. The next resistance level is at $1.068 trillion (indicated by the blue line), while the next major support is at $952 billion.

This support level is particularly crucial, as breaching it could result in the medium-term bullish trend being broken. However, it's also possible that we might witness a similar scenario to what happened on March 10th, where the global market briefly dipped into the cloud but recovered swiftly.

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

The current altcoin market capitalization stands at $478 billion, just below the major $500 billion resistance level. As long as the global crypto market remains above the monthly low, the overall trend will continue to be bullish. However, if the market falls below the monthly low, we may see a more significant correction that could last for several months.

BTC technical analysis

There haven't been any significant changes for Bitcoin since last week. BTC is currently trading at $28,263 and remains within the distribution range. The longer it stays within this range without breaking to the upside, the higher the likelihood that it will drop to accumulation range 1.

Ethereum TA

ETH is currently trading at $1,851, positioned between the blue and red lines of the Ichimoku cloud. As long as the price remains above the cloud, we are in a bullish trend. However, a drop below $1,808 could lead to ETH entering the cloud, which would potentially break the bullish trend.

In the chart below you can see the two buy targets I have for ETH at $1640 and $1509. I expect these to be hit in the next few weeks.

On-Chain Analysis

Before we get into the BTC onchain analysis section I want to first share with you the onchain index that I’ve been working on. I’ve called it the onchain edge index. The next section is just a brief overview of the index. I’ll write a more elaborate explanation in a separate newsletter.

As a onchain edge premium subscriber you will have access to the beta version of this index.

BTC onchain edge index

The Onchain Index is a comprehensive metric combining various indicators to assess a digital asset's risk and market trends. It includes the Relative Strength Index (RSI), which measures the speed and change of price movements, and the Puell Multiple (PM), which compares the daily issuance value of bitcoins to its 365-day moving average.

The Net Unrealized Profit/Loss (NUPL) metric considers unrealized gains and losses of all coins in circulation. At the same time, the Market Value to Realized Value (MVRV) ratio examines the relationship between market capitalization and realized capitalization.

The current Onchain Edge index value is 52 which is Neutral or Medium Risk.

Additionally, the Onchain Edge Index incorporates short-term (UPDIS), medium-term (UPDIM), and long-term (UPDIL) UpDown Indicators to determine market trends over varying timeframes.

Risk assessments for each indicator are calculated separately, with higher weight given to PM, NUPL, MVRV, and medium and long-term UpDown Indicator metrics in In addition, theIn addition, the final Onchain Index calculation.

The vision of the Onchain Edge index is to create a powerful tool that helps investors make informed decisions by providing a risk assessment based on a combination of key onchain metrics.

It can give you a more comprehensive view of the market’s health and potential future direction thus eliminating emotional decision making.

For the time being, I will update you in these newsletters and whenever a major change happens in the onchain edge index that you need to know about.

BTC on-chain metrics

Let’s have a more detailed look at this weeks onchain metrics.

Comparing the metrics of this week (03/05/2023) with last week (26/04/2023), we can see some changes in the market. The price has increased by 1.79% from 28,835 to 28,490.32. The RSI has also increased from 54.5 to 64, indicating a stronger momentum in price movements.

The Puell Multiple (PM) has increased from 1.05 to 1.24, suggesting a change in the daily issuance value of bitcoins. The NUPL has slightly increased from 0.3 to 0.32, showing a small difference in unrealized gains and losses.

The MVRV has also increased from 1.42 to 1.43, indicating a higher market capitalization compared to realized capitalization. The short-term UpDown Indicator (UPDIS) has remained almost constant, while the medium-term (UPDIM) and long-term (UPDIL) indicators have slightly decreased. The lower the UPDI values, the better it is to buy $BTC.

The overall Onchain Index is at 52.36, which is considered neutral (medium risk). This means that the current market conditions do not clearly favor buying or selling.

A drop of the UPDIS to -2.8 or lower can be a good medium to longterm entry for Bitcoin.

Based on the UPDI values we can see that Bitcoin has a lot lower values than Ethereum which suggests that Bitcoin might have a stronger rally or is closer to bottoming out compared to Ethereum. The lower the UPDI values the more it makes sense.

It goes without saying that the long UPDI should have a higher weighting since it has a long timeframe.

Trade Ideas

Here are a few coins i’m watching with buy areas at the first and second golden pocket (the two horizontal lines)

$RNDRNarrative: Metaverse & AI Rendering

FXS (Frax Finance)Narrative: LSD

MINANarrative: Zk

$GMXNarrative: Onchain trading

Conclusion

I hope that the knowledge shared in this newsletter, particularly the Onchain Edge Index, will serve as a powerful tool to guide you in understanding the current market risk in order to make informed investment decisions. As we navigate the ever-changing financial landscape, it is crucial to stay up-to-date with the latest market trends and developments.

Thanks for joining me on this journey through market analysis and trade ideas.

Cheers,

Onchain Edge