The overall sentiment of the market seems to be good these days. After Bitcoin just tried to break through, the concept of AI+Memes became popular and attracted a lot of people’s attention. A few days ago, everyone was still discussing various things such as geese, frogs, goats, etc. In the past two days, I found that many friends in the group have been enthusiastically playing Memes on APE. I don’t know where this Memes Pump wind will continue to blow in a few days?
Judging from the current operations of friends, the basic steps of rushing Memes are as follows:
The first step is to find the target. Some partners use on-chain tools (such as GMGN, AVE, DexScreener, etc.) to scan the chain, and those with technical conditions may also use programs to scan the chain. Some partners will focus on the news of various groups, hoping to get the recommendation and sharing of the group owner or group members as soon as possible. Some partners prefer to keep an eye on the dynamics of some celebrities or local dog hunters in Twitter (X) every day.
The second is the selection of competition targets. At least tens of thousands of Memes are added to the chain every day, and most partners cannot buy too many, so after finding some alternative targets, they will conduct quality checks, such as using the tools mentioned above or other security detection tools to conduct necessary inspections (to see if it is a Pixiu).
The second is the research goal. It mainly involves searching on Twitter (X), such as directly searching for the contract address or searching for the number of topics of the corresponding token.
Finally, the transaction is carried out. At present, I see that most people use OKX Web3 wallet to operate, and some aggregator platforms such as DexScreener are used to operate, or directly through some Telegram Bots. Of course, some partners may ignore the screening of security and social platforms in order to rush quickly, and directly start when looking for the target in the first step (if it meets the filtering conditions set by themselves).
The overall feeling is: fast. If you buy the right one, you can make money quickly, but if you buy the wrong one, you will lose money quickly. In short, we still recommend that you try Memes with a small amount, and pay attention to fraud prevention (anti-phishing links or Pixiu disks) and manage your mentality.
Although the market is unpredictable, many people like to make some judgments based on different angles. For example, some people judge based on their personal feelings, some people believe what others say, and some people like to make judgments based on some data or indicators... In the previous article (October 19), we also catered to the needs of some friends, mainly based on K-line and several relatively macro perspectives to make some basic judgments (guesses). This article is a supplement to the previous one. Let us continue to look at some other dimensions of on-chain indicators to see where the current market is.
1. Continued accumulation of whales
Based on historical experience data, whales always buy when the market is weak and sell when the market is strong. For example, they tend to accumulate at the beginning of a bull market and then sell in the middle and late stages of the bull market.
Many friends like to read various news. For example, when they see a certain crypto media/self-media saying that a whale at XX address has transferred or sold some bitcoins, they feel that the market is going to fall, and it seems that all whales are selling coins to dump the market. This is somewhat like looking at the sky from the bottom of a well.
In fact, from the overall situation, although some whales choose to sell their bitcoins due to panic or other reasons, most whales continue to buy and hoard coins. In the past 6 months alone, whales (wallet addresses holding more than 1,000 BTC) have accumulated 1.5 million bitcoins. As shown in the figure below.
According to the current on-chain data, the Realized Prices of Short-term and Long-term Whales are $27,000 and $63,000 respectively, as shown in the figure below.
From the Growth Rate Difference, we can also see that the bull market is still continuing, as shown in the figure below.
In addition, funds continue to flow into Bitcoin ETFs and the balance of Bitcoin on exchanges is constantly decreasing (Bitcoin in exchanges is constantly being withdrawn). Not only that, as the selling pressure from some miners and other entities (such as governments and institutions) decreases, it seems that small groups are also accumulating Bitcoin. If it is a bear market now, we should not see the situation above.
2. Are retail investors returning?
Compared with the previous bull market, retail investors in this bull market seem to be much more interested in MemeCoin than Altcoin. Judging from the current search trends, retail investors' interest in MemeCoin and Altcoin is somewhat similar to that in November 2023 (before the big rebound began). As shown in the figure below.
In addition, there are some intuitive feelings. For example, it seems that the major encryption-related groups are becoming abnormal again. Many groups are frequently discussing various MemeCoin/DogCoins, which gives me a sense of déjà vu.
3.BTC.D
BTC’s dominance has been on an overall upward trend since around September 2022. As shown in the figure below.
If historical data is anything to go by, Bitcoin’s continued dominance in an uptrend is a good sign as it shows that liquidity is entering the market and will also pave the way for a possible alt season. Once Bitcoin re-breaks through its previous ATH and starts a strong run, then, in theory, altcoins (part of them) will start to catch up and achieve rapid gains.
4.USDT.D
In our previous article on the topic of the alt season, we have already had some basic introduction to the USDT.D indicator, which shows the dominance of USDT and the inflow/outflow of USDT in the crypto market.
Typically, if USDT.D rises, it indicates that USDT dominance is rising, which in turn indicates that people are beginning to shift to a stable preference, indicating a possible bearish signal. If the opposite is true, it indicates a bullish signal.
From the current data, we can see that since hitting bottom in August this year, the total market value of USDT has increased from US$114 billion to US$120 billion, while USDT.D has dropped from 6.7% to 5.1%, as shown in the figure below.
This suggests that some of the wait-and-see funds appear to be now being used to invest in Bitcoin and altcoins. If the forecast is carried out as expected, when USDT.D drops to the 2%-2.5% level and its market value exceeds $180 billion, the entire crypto market is likely to peak again.
Of course, we need to pay attention to more than just USDT, because since December last year, the market value of USDC has been in an upward trend, which is definitely a good sign because American institutions prefer to use USDC. As shown in the figure below.
5. Other comprehensive indicators
In addition to the aspects we have listed above, there are actually many other indicators that can be used to help us make auxiliary judgments, such as those introduced in previous articles:
MVRV Z-Score: This is an indicator to determine whether BTC is undervalued or overvalued. From the historical data, since 2011, whenever the MVRV Z-score is close to or greater than 7, it indicates that the market is entering a carnival moment (bull market peak). The current value of this indicator is 1.97, and it reached 3.06 in March 2024, as shown in the figure below.
NUPL: This is an indicator used to evaluate the total book profit/loss of BTC held by investors. From historical data, whenever this indicator approaches or reaches 75%, it may be time to escape the top. The current value of this indicator is 52%, and it once reached 62% during March 2024, as shown in the figure below.
The Puell Multiple: This is an indicator that looks at the supply side of BTC (i.e. Bitcoin mining and its income). From a historical perspective, when the value of this indicator approaches or reaches 3.5, it indicates a signal to escape the top. The current value of this indicator is 1, and it reached 2.44 during March 2024, as shown in the figure below.
Pi Cycle Top Indicator: This indicator uses the 111-day moving average (i.e. 111DMA) and multiples of the 350-day moving average (i.e. 350DMA × 2) to identify possible highs in the market. For example, in 2017 and 2021, whenever the 111DMA moves upward and crosses the 350DMA × 2, it means that BTC has reached the top. At present, from the perspective of this indicator, this crossing has not occurred, which may mean that BTC has not yet formed the top of this cycle. As shown in the figure below.
In addition to the above indicators, there are actually many other indicators that can be used as auxiliary references. Interested friends can continue to query and understand through the data website in the Huali Huawai Toolbox (reply to the keyword "tool" in the back-end private message)
In general, if we ignore short-term fluctuations and look at it from a relatively long time perspective (such as the next 5-6 months), we tend to (guess) that the market is re-entering a new round of bull market, and may be in the middle and late stages of this cycle of bull market. This time, Bitcoin has a relatively high probability of a real effective breakthrough, and it is only a step away from $70,000. At this stage, we still do not recommend frequent position changes, and continue to wait patiently and wait and see.
At the same time, it is necessary to explain that although we are more inclined to believe that a new round of bull market opportunities may appear in the market within the next six months, we must also learn to respect the market, manage our positions according to our personal risk preferences, and have an exit strategy in mind.
This is the end of our sharing of this issue. For more articles, please visit the homepage of Hualihuawai. The above content is only a personal point of view and analysis, which is only used for learning records and communication, and does not constitute any investment advice.
