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Hi everyone,
 
All eyes are on the Coinbase IPO as expectations of volatility around the launch increase. In the meantime, on-chain data shows that bitcoin remains in a strong and healthy (only) uptrend.

Let's dig in.
 


Coinbase IPO as a proxy for crypto inflows


Coinbase, one of the world's most popular exchanges will be available for public trading on the Nasdaq's on Wednesday 14th. With earning's figures surpassing expectations, the IPO is a major event to look out for as a proxy for cryptocurrency markets.

Data points of interest:
  • Coinbase active users jumped from 2.8 million in the fourth quarter of 2020 to 6.1 million in the first quarter of 2021.
  • KYC'd accounts increased from 43 million at the end of 2020 to 56 million in Q1 2021.
  • Trading volumes reached $335 billion in Q1, in comparison to $193 billion for all of 2020.
  • Total assets on Coinbase increased 150% increase quarter-over-quarter from $90 billion to $223 billion.
Coinbase' performance is essentially a proxy-metric for the crypto market performance. as pointed out earlier, the company made $335 billion in the first quarter of 2021 as opposed to the $193 billion it made for all of 2020 - this sets a precedent for performance expectations of the exchange listing.

Check out the full article here!


Technically speaking


On-chain data update


The technical picture for Ethereum cover in the last newsletter remains unchanged as the runner-up crypto makes its way to $2,500 first and potentially towards $3,500 shortly thereafter. Similarly, bitcoin continues to inch towards the $70,000 level as buyers keep piling in. But what does the on-chain data tell us?

BTC held on exchanges trends lower

The number of bitcoin held on exchanges continues to decline, showing that the 'hodl' trend is still alive and strong.

While history is no guarantee, bitcoin typically does not enter the final stage of the parabola until after this trend shifts.



Adjusted SOPR shows room for growth

In bull markets, the Adjusted SOPR indicator provides insight on how much profit was realised by spent coins. If profits are taken by old coins the aSOPR will trend higher and conversely, it will trend lower when profitable coins are not sold.
  • A higher aSOPR metric means that more profit is taken off the table.
  • An aSOPR below 1.0 means spent coins were aggregated at a loss.


The chart above shows two observations:
  1. A relative bottom in the bitcoin price is observed each time the aSOPR trends towards one.
  2. Successive peaks were reducing over the last 3 months, suggesting that fewer profits were taken off the table and increasing longer-term confidence in the market. However, the trend observed a recent spike and quickly reset, potentially opening the door to a trend shift (which will need to be observed).
Reserve risk shows hodler confidence remains high

Reserve Risk is defined as price/HODL Bank. It is used to gauge the confidence of long-term holders relative to the price of bitcoin at any given moment. When confidence is high and price is low, the risk/reward to invest is low (i.e. the Reserve Risk). Conversely, confidence is low when prices are high and the risk/reward is unattractive at that time (high Reserve Risk).


More information on the hodler calculus is available here, but in essence confidence remains high at the time of publishing.

At this stage of the game, short of a cataclysmic and unexpected scenario completely resetting market dynamics, bitcoin is within a reasonable and healthy uptrend - at least when viewed within its historical context. The incoming Coinbase IPO could bring a bout of volatility due to the magnitude of the event, but in all likelihood said volatility will probably resolve in the same direction of the trend - up (only).

Bulls lead the way.

Catch you next time.
 

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Read More: April 14 Coinbase IPO to unlock next wave of crypto inflows?



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Best regards,
Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
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Disclaimer: This email is written for information purposes. All trading carries risk and one should never risk more than one can afford to lose. All content presented here are ideas and opinions and will not be seen or construed as financial or investment advice.
Copyright © 2020 Chris on Crypto, All rights reserved.

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