Professor Satoshi

Pretty large size 325k ETH (approx 526.5mm USD) was withdrawn from Coinbase on Sep 4th Labor Day. Could be a large OTC transaction since internal transfers usually have a corresponding deposit.  

Miners: What are the miners doing? Below blue line indicates amount of coins held by the miners wallets tracked by CQ. You’d be surprised to see they are generally pretty good swing traders. They were sellers starting in Aug 2022 and finally starting on May 27 this year they started accumulating. Technically speaking, it’s in their best interest economically speaking to start accumulating before the halving which is scheduled for April 2024. Netflows: In the first half of July we had muted outflows (still outflows) as price hovered in a tight range of 29k-31k. In the last week of July we saw noticeable inflows of BTC into spot exchanges. Interpreted as de-risking against resistance. This is not the type of on-chain I’d expect to see despite recent news of BTC ETF via BlackRock (which I think can be approved sometime this year). SOPR: The SOPR values hovering at 1 while price is range bound continues to depict the PvP (player vs player) nature of this market. There isn’t any new money coming in, technically we’re just passing it around. Values of 1 mean all Bitcoin on-chain are at break even in terms of PnL. NUPL: We never reached euphoria for BTC this bear market rally. I think the price level I’d feel euphoric at is between 34k-40k. This doesn’t give insights to actual direction but it’s a good measure of profit & loss + sentiment.     

In June, spot exchanges had net outflows, mainly when Bitcoin traded at 25k-26k. Defending this level was important to maintain the uptrend. Outflows continued in early July but less so due to resistance at 30k-32k. Breaking 32k could lead to 40k this year. Regarding Bitcoin Puell Multiple, it resembles 2019's rally, and we're in a similar value area as in October 2021. The current point in July determines whether we reach 30k-40k BTC. In June, Ethereum had net outflows from spot exchanges, particularly when it dipped to 1650. Now there are inflows after the first week of July, possibly due to Bitcoin focus and anticipation of BlackRock's BTC ETF. Selling Bitcoin and rotating profits into ETH might be a short-term strategy upon ETF approval. Regarding Ethereum inflows/outflows from Coinbase, significant outflows were recorded in 2023, indicating strong buying interest surpassing 2022 levels. Assuming these are large OTC deals, the trend could continue in 2023.     

In the last on-chain update I wrote in March (sorry I skipped April because was extremely busy) I noted that the SVB debacle introduced a wave of dip buyers. I think those dip buyers were rewarded with good entries but if you take note, immediately after there were a wave of deposits. Personally, I sold the bounce in BTC immediately afterwards only keeping 10% of the buys (regret). April was mainly a mixed bag until the end of the month when we saw some inflows probably front running May. But early in May we saw a lot of dip buying as well. That brings us to current where we now have outflows due to the recent Binance – SEC news. I wouldn't interpret this as sticky demand. Mainly folks who want to withdraw BTC since it is faster than withdrawing fiat. ETH outflows are much healthier. Again a notable spike due to recent SEC news but all throughout April and May there were largely withdrawals. SOPR - In the last on-chain update in March this indicator was observed as a “potential bullish turn”. We’re in bull market territory since people are in profits and we’re bouncing from 1. The only thing is… people are immediately taking profits. In general most are breakeven from their on-chain BTC entries. Additionally, this chart can show us how PvP (player vs player) market this has been. People are extremely greedy and eager to take profits. NUPL – We hit greed, and are coming back down now.. History doesn’t always repeat itself but it often rhymes. Perhaps we won’t see euphoric levels like 2019 since market conditions are different (tightening of economy).     

There are some early signals of a bullish turn for BTC. Future readings in the coming months would confirm.     

This analysis is for the big picture, not for day to day minute price action on Bitcoin. Puell - Historically, significant market bottoms have been seen at Puell Multiples less than 0.5, indicating profitability is 50% below the yearly average. Value buy territory started when BTC hit 18k in Jun 2022. NUPL - The first flash of this was also June 2022, around the 18k area for BTC SOPR - Finally, after many many months… it is clear BTC is in profit mode - see red box. The key to SOPR is seeing it bounce from 1 after people take profit, that means people are willing to buy the dip. This is a significant change in trader/investor psychology when SOPR dips below 1. Most people do NOT want to sell for a loss… when you see that they are, it means they’re rushing for the doors (bearish). I'm looking for the bounce from 1 to confirm bullish continuation bias.    

Are we overheated??? Technically, no. This is based off OI and funding. You can argue that there are significantly less participants in the market which is why OI is low comparatively to 2021-2022. Funding rates are positive, but not overheated like we saw in 2021. Looks healthy to me, as in potential continuation of this trend. That is not to say we wont see a pullback to account for people taking profit and to punish late bulls. Spot exchange withdrawals are kind of muted on the rally, a bit of outflows but not too significant to raise any eyebrows.   

Has been a while for me CQ fam, sorry about that... there are some things I noticed though as I've scanned across on-chain data. 1. MVRV is hovering above "no brainer DCA levels" - historically an amazing indicator as you can see from 2019 lows. 2. Largest stablecoin inflow since 2021 - I think there is already some dip buying going on at 19k BTC 3. Holy Trinity - Someone made this chart during the bull run and I want to share the work... MVRV and Puell look good, but NVT seems to be losing signal?    

38k BTC recorded as an outflow from Coinbase on Thursday morning. Coinbase is a notable NA exchange, potentially OTC deals ongoing now as prices are in "value buy" territory for BTC?  

Around 11:00am EST CBP saw a 433k outflow of ETH. 1st chart - netflows: 433k 2nd chart - outflows: 900k 3rd chart - inflows: 450k Still investigating but could be a large OTC deal.