In this report, we bring to you the latest in on-chain crypto asset analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB). ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data.
Indodax research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Bitcoin price is currently sitting at $37,675.40 and investors seem to be uncertain about its next potential move.
While it is anybody’s guess what ends up happening with fed policy and the Ukraine conflict, on-chain data can help us identify key price levels of buying and selling activity in the short term. Using IntoTheBlock’s IOMAP indicator, we can identify clusters of addresses concentrated around areas of high buying activity.
As of Feb 21 through IntoTheBlock’s Bitcoin In/Out of the Money
- Bitcoin is currently at a key support level between $37,616 — $38,695.28, where 675k addresses previously acquired over 685k BTC
- If this level were to break, there could be some buying activity at $36,500 but the greater support level is closer to $32,000
- On the other side, Bitcoin is facing stiff resistance ahead. 431k BTC was previously acquired just above $38,000 which is expected to act as a major point for sellers prior to potentially aiming for new highs
So that’s the on-chain view of the next possible movements for Bitcoin, but what about futures?
As of Feb 21 through IntoTheBlock’s Bitcoin Perpetual Swaps
The break-down — Perpetual swaps are the most traded Bitcoin instrument. These charge traders a funding fee to keep prices pegged with spot markets.
As Bitcoin remains roughly 50% down from the previous all-time high, funding rates decreased to near-zero, pointing to the market deleveraging and taking a more neutral position. As well, the volume and open interest have both remained particularly stable over the past few weeks. Looks like the recent price movements have not been driven by futures.
By diving into on-chain data we can better understand how the market has been adjusting to the recent dip. Here we can observe a decrease in the supply of crypto available to be sold.
Using IntoTheBlock’s Bitcoin On-chain Flows
Possible supply shock: IntoTheBlock’s Netflows indicator reveals an increasing trend of outflows as shown in the graph above.
- More than 80,000 BTC has left centralized exchanges in 2022
- On January 29th, we spotted the largest outflow since April 18, 2021, marking the recent bottom.
- Remember that exchanges outflows mean that users are removing their funds from centralized exchanges to most likely cold storage wallets, decreasing the available supply for buying.