⛓️Block On Chain 008⛓️
Week of October 25-31. Uptober was fun, what's next!?📈🎃
Good Evening Investors,
Surprise, surprise, Ethereum hit ATHs this week topping at US$4400! This marks another milestone in Ethereum’s price history. As of now, it resumes in consolidation at/below ATHs at the US$4200 price level.
Macro
This week we saw a lot of volatility across the market thanks to a mid week price dump from Bitcoin - the market leader. This week’s price correction was induced by the a over-levered liquidation event. This price dump was quickly bought up with Bitcoin returning back to > US$60 000 soon after - demand for Bitcoin was readily present.
$785M Longs liquidated on this dip. Largest liquidation since September 19th. Stop buying on leverage. $BTC
In other news, an additional Bitcoin Futures ETF was approved this week leading me to believe that a Bitcoin Spot ETF approval is around the corner. The Bitcoin Futures ETFs are bullish, but as mentioned in previous weeks I am still looking for a Spot ETF approval - still bullish.
As mentioned in Block on Chain 005, the Ethereum network underwent the well awaited Altair upgrade this week and was a success. The Altair upgrade is a crucial upgrade to the Ethereum Beacon Chain and is a necessary upgrade to merge from Proof-of-Work consensus model to Proof-of-Stake. Altair offers features like: Light Client support and increased validator penalties. Ethereum is scaling - bullish.
On-Chain
All Time Highs in Ethereum price was hit this week while on-chain datacontinued to present this awaited bullish price action.
Ethereum’s Balance on Exchanges - All Exchanges continued it’s trend downward as market participants continue to take their Ether off exchanges. This means that market participants have less of an intent to sell their Ether into this price rally - but rather hold onto it long term. In terms of Supply and Demand, the lack of supply available to be sold creates illiquidity in the market meaning that there is a lack of holders willing to sell their Ether which naturally makes price go up - Bullish.
Another interesting metric to consider during this rally is Number of New Addresses1. While price was rallying to ATHs so was the number of unique Ethereum wallet addresses. A spike in addresses like this has not been seen since Ethereum hit previous ATHs in May 2021. This is bullish as it shows that market participants are becoming increasingly more active on the network as we enter into Price Discovery past ATHs.
Observing both of these metrics is very bullish for one simple reason: Less Supply of Ether available meets more demand for Ether - number go up2.
Conclusion
The trend of bullish metrics is converging as prices for Bitcoin and Ethereum remain at/below ATHs - the divergence of price and on-chain data is no more.
Ethereum’s consolidation at/below ATHs with increased accumulation and increased activity is very bullish to me. Market participants aren’t backing away at this price resistance, instead they are showing behavior that typically signals expectation of higher prices to come - bullish.
Despite having a small scale liquidation event this week, I am still bullish as it appears the Spot buyers have continued to accumulate through these price dips. These pull backs are actually beneficial for long term holders of the asset and allows for a natural unwind of leverage in the market.
November is approaching next week which means I will be watching the Monthly candle close - an Ether closing price > US$4200 would confirm bullish momentum. I am also looking for further accumulation on-chain in the next coming weeks and a confirmed breakout past ATHs. For now, a consolidation below ATHs appears to be comfy and bullish🚀
-Kadeem
The number of unique addresses that appeared for the first time in a transaction of the native coin in the network
‘Number go up’ refers to asset price. For context, this concept/analogy does not refer to short term price action, rather this is a long term investment view.
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