Here's today's bumper market update – with extra metrics, extra analysis, and a couple of extra gifs. Because, it's Wednesday and you deserve it. This update was produced in conjunction with IntoTheBlock.com. ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets.
If you’re new to the world of crypto trading and want to know how to best use these indicators to trade, don't forget to take a look through our beginner’s guide to crypto trading series, featuring in-depth explorations of common strategies, market analysis techniques, and more.
The content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. Luno always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.
All information is correct as of 10:00am BST.
We closed yesterday, 6 October, 2020, at a price of $10,621.66, with a daily high of $10,803.46 and a low of $10,565.20.
On 6 October, 2019, the closing price was $7,988.16. On 6 October, 2018, it was $6,588.31 and the same date in 2017 was $4,370.81
We’re 47.13% below bitcoin‘s all-time high of $20,089 (17 December 2017).
As of today, buying bitcoin has been profitable for...
93.1% of all days since 2013-04-28.
The volume traded yesterday was $22,264,958,686 – up from $19,385,191,766 the day before.
Bitcoin’s market capitalisation as of yesterday was $196,604,996,202, up from $199,971,325,817 the day before. To put that into context, Jeff Bezos is currently worth $175.3 billion. This means he can only afford to buy 89.16% of all bitcoin.
No Jeff, not for you it’s not. Better luck next time.
Fear and Greed Index
Sentiment is at 43 – down from 47 yesterday. Extreme fear can be a sign that investors are too worried, which could be a buying opportunity. When Investors are getting too greedy, that means the market may be due for a correction. Are we set for a big move?
On-chain positions shows strong support and resistance
The In/Out of the Money Around Price shows price levels where Bitcoin addresses have previously bought, categorising addresses as in the money (profiting) or out of the money (losing money). The size of these clusters represents the volume of bitcoin held in current positions that was purchased in this price range.
Here, we can see that over 735,000 BTC was purchased by 1.31 million addresses between $10,254 and $10,563. This is expected to (and has been) an area of strong support as there will be buying pressure from holders to sustain this key range.
On the other hand, there’s a big area of strong resistance for bitcoin based on on-chain data. This resistance is located around the $10,700 mark, where 1.41 million BTC has been bought by 1.91 million addresses. This creates resistance from many of these addresses looking to close their positions to break-even.
By comparing these levels to those provided by technical analysis, we can verify buyers are expected to create support near the $10,200 range, while sellers will provide resistance around $10,700.
Bitcoin Volatility is showing July’s Numbers
As can be seen in the graph above, it’s clear that bitcoin has been more stable recently – with its 30-day volatility dipping below 21%. This is a result of bitcoin hovering around the $10,000 level for approximately 72 days.
At time of writing, the 30-day volatility stands at 20.71%. This period of low volatility was last surpassed in July of 2020, when Bitcoin recorded its lowest period of 30-day volatility ever with 15.35% after staying on the $9,000 mark for more than 90 days.
Despite the lack of volatility, Bitcoin network activity has been hitting new highs
Daily active addresses provide a valuable metric for Bitcoin’s usage. While the number of addresses does not necessarily equate to the number of Bitcoin users, this indicator still provides a valuable approximation to Bitcoin’s daily activity. As we can see in the graph above, Bitcoin daily active addresses hit a two-year high a few days ago.
This is a clear indication that demand for Bitcoin has been growing steadily, as reflected in the number of active addresses. Moreover, Bitcoin saw a similar pattern in early July when daily active addresses also reached a high while prices were trending sideways. This increase in demand preceded a 20% break-out.
Yesterday, there were 8,450 tweets sent with a positive connotation towards bitcoin, 25,166 with a neutral connotation, and 1,916 were negative.
Global In/Out of the money
For any address with a balance of tokens, ITB identifies the average price (cost) at which those tokens were purchased and compares it with the current price. If the current price is higher than average cost, address is ‘In the Money’. If the current price is lower than the average cost, the address is ‘Out of the Money’.
Bitcoin’s market dominance
Bitcoin's market dominance stands at 60.15. Its lowest recorded dominance was 37.09 on 8 January, 2018.
Relative Strength Index (RSI)
The daily RSI is currently 47.40. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Resistance and support
What they said yesterday…
Chris Larsen argued that China is investing heavily in the development of a next generation financial system — unlike the U.S. https://t.co/2p923QQPCj
— Cointelegraph (@Cointelegraph) October 7, 2020
"Since 2010, inflation has turned $1 into 84 cents while $1 invested in Bitcoin would be worth $274,000." - @Cointelegraph
— Dan Held (@danheld) October 6, 2020
#Bitcoin has become my bank account.
— Jason A. Williams🚀 (@GoingParabolic) October 6, 2020
What other data points would you like to see covered in our Daily Report? Let us know on Twitter.