Who? What? When? Where? How? Why? Doesn’t matter. Zoom out. Think longer. Research analyst gckaloudis describes his thought process for evaluating $BTC price moves for this week’s Crypto Long & Short newsletter.
Bitcoin put up solid numbers last week, gaining about 1.5% from Monday to Friday . Normally this type of move is only worth celebrating in the traditional markets.for bitcoin . Let’s walk through the usual course of action I take to try and figure out what’s going on.After I see a movement in price, the next thing I do is check on market sentiment to get a feel of … well … feeling. There are two ways to do this, anecdotally and empirically.
After this price movement, anecdotally, the sentiment on Twitter seemed good. People were excited about the modest run-up and weren’t really warning against anything. Empirically, the index showed “fear,” where it has been for most of April.After I gauge sentiment, I look at various data feeds and look for an “interesting thing.” This week’s interesting thing happened to be about exchange volumes.
On the surface, low trade volumes seem inauspicious, especially considering the last time they were this low was when bitcoin’s price dipped below $30,000. However, if we zoom out a tad, this looks like nothing out of the ordinary. It looks like the cyclical nature of markets and not some sort of mass exit from the market. A mass exit would, for the record, require a jump in volume as those participants unload their positions. Right now, I’m not worried.
The last thing I do after having my opinion formed on the latest “interesting thing,” I zoom all the way out and check out one of my favorite charts that calms me as a bitcoiner. That chart shows thealongside the liquid and highly liquid supply of bitcoin. Illiquid supply represents the amount of bitcoin that hasn’t moved or been sold in a while. The chart largely speaks for itself. There’s a lot of illiquid supply out there and it has been growing.
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