Welcome to the second Fractalhedge Report.
Last week we saw assets were unable to make a new low on bad CPI news. In the contrary prices went up. This might have been the turning point.
In this report I’ll first discuss what the on chain data is telling us. Secondly ill discuss the equally weighted dollar index, cot data and the funding rate.
Lastly ill discuss the Ethereum Prophecy, ZRX and what these charts tell us for the rest of the market.
Apologies for the grammar mistakes. I’m too tired to read the report again and correct them.
On Chain data.
Below I show on-chain data I believe is most important. I use this data to spot turning points in the market (tops and bottoms) and to get an indication of the general strength of the market.
Percentage last active.
On chain supply last active looking good. You can see below (edited in green and red phases) as the line goes down, prices go up.
Below you can see more on-chain data which I believe is indicating a turning point.
Long- Term Holders
Long term holders MVRV
Long term holder NUPL
Entity adjusted relative unrealized loss
Entity adjusted MVRV
Dollar index, COT and funding rate.
Dollar index
This equal weighted dollar index hit a big zone from 333-349. Furthermore the price broke down from a rising wedge. Topping pattern is still in play.
COT data
COT data is looking increasingly in favor of EUR shorts. But as we have seen in previous weeks. As eurusd went from 1.08 to parity, crypto didn’t make new lows. In the contrary crypto prices went higher.
COT data can be a lagging indicator, as shown in previous years. Because of this I’m not changing my long bias at this moment.
If the equally weighted dollar index breaks 400 and ethereum and bitcoin break new lows this view might change. But i’m not expecting this at the moment.
Funding rate
The market is still heavy short. As you see you can see the funding rate is more negative compared to previous bottom and for a longer period of time.
Ethereum Prophecy
Technical Analysis
Ethereum had a rejection at 1600$ of the 2019 vwap. Ethereum is now going for the retest of the yearly S1 at 1300$. I expect this level to hold.
Orange line is the all time vwap. As long as this level holds there is a good chance the Ethereum Prophecy plays out.
Ethereum merge
I believe ethusd shows the true story of the current strenght in crypto.
Merge is coming up in September.
What does the merge mean?
The burning will put deflationary pressure on the network and likely cause token prices to rise. Additionally, an anticipated change to the minting process has been referred to as “Ethereum halving” or “triple halving.” This will limit new Ethereum supply as the number of coins produced per validation is reduced.
I think prices will run up till September to create a (short term) sell the news event during the merge.
ZRX Prophecy
Another coin I have been looking at for a while. If the Ethereum Prophecy remains true and continues its way to all time high territory, I expect all coins to gain momentum. Especially the ones that have been under long suppression. I’m thinking about coins like LTC, ZRX, TRX and XRP.
LTC which I have talked about in the previous report is still following the Silver Prophecy.