|PTGR NOVEMBER HIGHLIGHTS|
Dear valuable clients,
Please find the following key insights from our aggregated research:
Overall Take-Home Message:
The Bitcoin price continues to consolidate around $16,500, supported by a trend line. Bitcoin December All-Time high was back in 2021 around $47,000. From a long-term perspective, the price of bitcoin is well-positioned to start another bear market rally. Investors can expect bullish convergence to play out when combined with optimistic on-chain metrics. Invalidation of the bullish thesis will occur on the flip of the $15,550 support level. This development increases the likelihood that 2022 will end happily.
Investments in digital assets are very volatile. Investors should keep in mind the same primary goals despite potential differences between cryptocurrency’s fundamentals and technical indicators. First, keep yourself safe by understanding when to sell, trim losses, or take profits. Second, get ready to make money if the price of bitcoin starts to increase.
According to on-chain statistics, non-whale Bitcoin investors appear to have had no problems with the cryptocurrency bear market or the fear, uncertainty, and doubt (FUD) surrounding the demise of FTX, Genesis, and BlockFi.
According to research published by the blockchain intelligence platform Glassnode at the end of November, smaller retail investors have grown more enthusiastic about Bitcoin and have begun amassing more BTC.
NEWS UPDATE OVERVIEW
1) What happened in November?
The cryptocurrency market has kept traders and investors perplexed with its unexpected movements with only one month remaining before the year closes, but all that might change in December 2022.
The global crypto market saw significant shifts in November, and the FTX and related companies’ plunge left both skeptics and enthusiasts uncertain about the sector’s future.
The market capitalization of all crypto assets dropped to as low as $730 billion, although it was able to somewhat rebound from the multi-month lows reached in November. The FTX mystery caused difficulties for cryptocurrency owners, causing the prices of Bitcoin (BTC), Ethereum (ETH), and the majority of altcoins to fall to multi-month lows during the past month.
Investors have been tempted to return to the market, nevertheless, by the promise of quick profits. Advocates for the cryptocurrency industry thought that prices this low represented a Black Friday discount for BTC and other cryptocurrencies.
Analysts’ projections of a promising future were consistently challenged by increased market volatility and abrupt price changes. Additionally, while players conjectured about the destiny of FTX creator Sam Bankman-Fried, regulatory concerns hung over the whole world of cryptocurrencies.
As the fallout from the FTX crash continues to ripple across the sector, crypto executives and lawmakers are becoming more vocal in their requests for regulation of the industry.
Maxine Waters, the chair of the US House Financial Services Committee, and Christine Lagarde, the head of the European Central Bank (ECB), have both advocated for regulation and oversight of cryptocurrencies in the European Union as an “essential requirement.”
Following the FTX collapse, which occurred as a result of the now-bankrupt cryptocurrency exchange funneling customer assets to offset its own risks, crypto exchanges devised a transparency solution known as “proof-of-reserves.” Proof of reserves (PoR) is a third-party independent audit that strives to confirm that a custodian has the assets it claims to control on behalf of its customers. This auditor creates a Merkle tree using an anonymized snapshot of all stored balances.
November marked the start of the 2022 FIFA World Cup in Qatar. Millions of soccer fans not only received their dose of sports and rivalry this year, but they also have been able to connect with the numerous Web3 brands
FIFA+ Collect is FIFA’s own NFT marketplace built on the Algorand blockchain. In the Metaverse, fans can play numerous soccer-themed Web3 games and see a digital version of the FIFA World Cup Lusail stadium.
Messi collaborated with Web3 company Ethernal Labs and its NFT marketplace Ethernity to create his second NFT collection, the Messi Time Machine Collection, and Cristiano Ronaldo debuted his NFT CR7 collection on Binance.com as part of a multi-year exclusive agreement with the exchange.
Ledger, a developer of cryptocurrency wallets, is launching its cryptocurrency debit card throughout the UK and Europe as a series of crises in the ecosystem increase demand for self-custody options. Through the companion app Ledger Live, users of Ledger’s Crypto Life (CL) card may transfer cryptocurrency between card accounts and hardware wallets.
Ledger claims that after initially unveiling the initiative at the Ledger Op3n conference in December 2021, it got over 400,000 sign ups for the waitlist.
Customers in the UK and Europe may use their cards at any of the 90 million physical locations and online retailers who accept Mastercard.
2) Where do we stand?
The same applies this month as we talked about in our last newsletter. According to historical standards, the next bull run should happen close to the Bitcoin halving. That means there is some time ahead to accumulate. As long as Bitcoin trades sideways or lower in the 14k-16k region, the plan is to go with the DCA strategies. If Bitcoin breaks below $15,500, we could trend even lower, and BTC’s price may reach a high of $20,000 – $25,000 by the end of the year if the bulls are able to unseat the bears short-term.
Bitcoin hashrate keeps skyrocketing similarly to October. The coming weeks will be difficult for bitcoin miners since low prices pose a risk of making the network service unprofitable for all but the largest operators. Although bitcoin miners have been selling often, the overall amount of their treasuries has mostly remained constant this year. According to CryptoQuant, miners together now own 8,184 more bitcoins than they did at the beginning of 2022. HashWorks Digital Industries co-founder Todd Esse has said that December will be crucial for bitcoin miners who are only hanging on.
Similar to others, Bitcoin miners are experiencing significant difficulty in selling their acquired BTC for a profit. Although it’s unclear how much financial agony the typical miner is experiencing, one established metric is getting ready to declare “capitulation” once more.
On Chain Data:
The chart above shows the 7-day Cumulative Net Realized Profit/Loss, denominated in BTC for comparison between cycles. Remarkably, over the last week, the market realized a net loss equal to -521k BTC, which is again close to the all-time largest recorded in history.
Comparing the current Cumulative Net Realized Loss to the COVID and LUNA Crash, with 44% and 39% price decline respectively, the market has shown a larger degree of strength during the recent capitulation with only 26% correction.
New Investors Under Pressure
One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale. November has seen the fourth largest capitulation event on record, recording a 7-day realized loss of -$10.16B. This is 4.0x larger than the peak in Dec 2018, and 2.2x larger than March 2020.
the entities holding < 1 BTC (also labelled as Shrimp ) have recorded two distinctive ATH waves of balance increase over the last 5-months. Shrimps have added +96.2k BTC to their holdings since the collapse of FTX, and now hold over 1.21M BTC, equivalent to a non-trivial 6.3% of the circulating supply.
The Adjusted MVRV Ratio is a tool which discounts the profit held in dormant or lost supply (coins unmoved for > 7yrs). Values above 1 indicate that the ‘Active Market’ is in aggregate profit, whilst values below 1 denote the market is underwater.
This metric is currently returning a value of 0.63 (average unrealized loss of 37%), which is very significant since only 1.57% of trading days in bitcoin history have recorded a lower Adjusted MVRV value. In other words, if we discount profit held across the presumably lost supply, the current market is the most underwater it has been since the near pico-bottom set in Dec 2018 and Jan 2015.
3) Outlook: What could happen?
Crypto news for the weeks ahead
Congresswoman Maxine Waters (D) and Congressman Patrick McHenry (R) asked Sam Bankman-Fried to appear before the US House Committee on Financial Services.
For the month of November, the Consumer Price Index (CPI) figures will be made public by the US Bureau of Labor Statistics. This is a crucial signal that the Fed will take into account as it contemplates future rate hikes.
The Federal Open Market Committee (FOMC) will convene on December 14. The possibility of more interest rate increases will be disclosed. The current market trend is for a fifth interest rate increase, but with a change from the previous four straight 75 bps increases to “only” 50 bps.
One might almost be excused for failing to notice that Bitcoin miners are working under the strongest sell pressure they have experienced in around five years given that FTX receives the majority of industry news. In addition, the November selloff ended up being the fourth-largest realised loss event in Bitcoin history, and it turns out that since the FTX implosion, the net position change of shrimps (holders of less than 1 BTC) has practically “hockey-sticked.” In other words, at previously unheard-of rates, smaller participants are buying the dip.
MONTHLY SPECIAL OFFER
Offer Of This Month
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Free Consulting Call Link
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