Market Analysis Featured

Market Intelligence 13

Feb 9, 2022 • 3 min read

Since last week, price has increased by 12.5% from $38.k to $44.1k at the time of writing
Price jumped by 10% in the space of a few hours on February 4th
Bitcoin traded in a tight channel between $41k-$42k throughout the weekend
Reached a monthly high of $45.2k before settling at $44.1k

Realised price is the last price at which Bitcoin was transacted
URPD Metric shows the distribution of realised prices for the current supply of Bitcoin
12.41% of supply has last transacted between $36.2k - $41.2k
- This zone has consolidated as a strong support zone as a lot of coins were bought within this range since last week
On another note, 25.20% of the current supply was last transacted above current price levels, meaning that the market is top heavy
- A top heavy market infers that investors that a significant portion of the market bought above current price levels
The Bitcoin market is top heavy despite the three month downtrend since November 2021
As such, if current uptrend in price continues, it will likely meet several resistance points above

A simple but effective method to gauge whether prices have bottomed, is to use the Mayer Multiple (MM) Model
- It is calculated as a ratio between price and the 200-day moving average (MA)
- The 200d MA is widely observed as a macro indicator in 'Technical Analysis' & can therefore indicate degrees of under / over valuation relative to the long-term mean
The MM reached -0.71 at the end of last month, which represents an almost 30% discount relative to the 200d MA
Bitcoin has historically been undervalued at current MM levels which have in the past three years signalled generational bottoms
To confirm that a bottom has been set and that the uptrend in price has resumed, we would need to see MM break above 1.0 (Current Price = 200d MA) and retest 1.0 successfully (MM breaks above 1.0 -> retraces back to 1.0 -> bounces off 1.0 and resumes uptrend)
According to the Mayer Multiple Model, price needs to surpass $49k (current 200d MA) for MM to break above 1.0 and confirm an uptrend

The MRG metric models the degree of momentum in price action
- Succesive higher / lower peaks indicate increasing momentum to the upside / downside
- Breaks above / below 0 indicate that a new uptrend / downtrend is in play, with an anticipated swing duration of approximately 14 days
Market top in Mar-Apr 2021 showed a bearish divergence as momentum was increasing to the downside as prices were increasing
The market currently reflects a bullish divergence, as momentum is increasing to the upside, whilst prices are declining
- As indicated in blue below, MRG has in fact broken above 0, suggesting that an uptrend over the next two weeks is in play

The increasing upward momentum observed above has pushed STHs into net profit
- STHs are investors that have held Bitcoin for less than 155 days
SOPR reflects the realised profitability of STHs:
- Value < 1 = Net Loss; extended periods of net loss are characteristic of bear markets as indicated in red below
- Value > 1 = Net Profit; extended periods of net profit are characteristic of bull markets as indicated in green below
STHs have returned to net profitability with the current uptrend

There is support provided in the $36k-$41k area as seen with the URPD metric
A potential bottom is set as prices recently reached historical undervaluation according to the Mayer Multiple Model
There is a reasonable amount of momentum behind the renewed uptrend as seen with the Market-Realised Gradient, which has** pushed STHs into profitability**

Moving forward ->

It is key to watch whether long-term holders (LTHS) will take exit liquidity as uptrend continues

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