Does the Accumulation Begin?

July 5, 2021

The message continues to be: Stick to the plan.

Bitcoin is holding above 30k, and many coins still look great under the surface.

Unless Bitcoin moves back below 30,000, the bias is still higher.

We're incorporating more of this on-chain analysis into our work every week, simply because there's a slew of insightful data points.

Just last week, we discussed how exchange balances of Bitcoin continue to trickle lower, signaling that buying pressure could be returning.

Now we're also seeing Ethereum's exchange balance on the cusp of new lows - it's no longer just Bitcoin:

Further lows in this exchange balance is definitely a data point for the bulls right now.

And what's even more interesting is that the number of addresses with over 10,000 Ethereum is making new highs:

In Crypto, we call these addresses the "whales."

Think of these accounts as the smart money in this complex.

Just as we look at Commercial Hedgers when evaluating the futures market, the positioning of these large accounts can reveal some great insights.

And clearly, there's a growing number of them, signaling that these whales are potentially accumulating for higher prices.

Some of data provided by The Block analyzes a variety of sentiment measures. These include social media mentions, app downloads, and in this case, new weekly Twitter followers of crypto accounts:

Seems like quite a washout of sentiment, right?

Was this it?

Has the "dumb money" had enough, and now the bigger players are taking the other side of their trade?

These major spikes in the net realized profit and loss tell the same story:

This is calculated by evaluating the difference in the price of Bitcoin from when people bought, to when they transferred to another wallet, typically their exchange. This indicator is assuming that people are selling their Bitcoin when they're transferring it.

Long story short, this is simply telling us right now that people are essentially selling their Bitcoin at record losses.

When we see these major negative spikes, which have taken place in the last few weeks (and particularly when Bitcoin undercut its lows), it can be a sign of potential near-term capitulation.

The last "ugh, just get me out!"

The question is, will these developments under the surface eventually show through price?

It certainly looks to be going that way, but ultimately, time will tell...

Moving on, every Monday we run a scan of our crypto universe to see the names that showed the greatest strength last week.

This one identifies the largest gainers of the entire week as well as the largest single-day moves throughout the last seven days.

Here's this week's Risers scan:

Look at that Compound, eh?

Just look at this thing, what a monster...

The risk vs reward is a tad stretched here, so we probably only want to be buying weakness back to 385 with a target up near 570.

A lot of these other names on this week's table have been spilling to the top in our other scans, and we've already been making a tidy buck from them recently.

Here's what we said about Elrond last week: