Onchain Analysis - BTC

5 часов назад

Introduction

The indicator is designed to provide traders with a comprehensive view of BTCUSD market dynamics by integrating key on-chain metrics and technical analysis tools. Currently, it consists of three main components, with plans to add more on-chain metrics in the future: (i) NUPL (Net Unrealized Profit/Loss) values with corresponding bar color coding, (ii) 350DMA and 350DMAx2, and (iii) an automatic logarithmic Fibonacci extension tool. These features collectively aim to enhance traders' ability to interpret long-term market sentiment and identify potential price movements.

Explanation

1. NUPL is defined as the difference between Relative Unrealized Profit and Relative Unrealized Loss or, equivalently, (Market Cap−Realized Cap)/Market Cap. This metric indicates whether the network is in a state of net profit or net loss. Values above zero suggest a net profit, while values below zero indicate a net loss.
   
   In this indicator, bars are color-coded based on NUPL values to visually represent market sentiment, helping traders quickly gauge the proportion of holders in profit versus those in loss. NUPL can be analyzed in two distinct ways: LTH-NUPL (Long-Term Holders) and STH-NUPL (Short-Term Holders). However, this distinction has not been incorporated here, i.e., the NUPL values shown are aggregated across all holders.
   
   
2. 350DMAx2: The 350DMAx2 represents twice the average closing price of Bitcoin over the past 350 days and is a key component of the Pi Cycle Top Indicator developed by Philip Swift. Historically, during bull cycles, Bitcoin's price has often retraced upon first reaching the 350DMAx2, typically pulling back to the 350DMA before attempting to break above the 350DMAx2 on subsequent attempts. This behavior highlights the significance of the 350DMAx2 as a critical level for long-term holders to monitor.
   
   
3. Fibonacci extension levels can be used as potential target points during the price discovery phase. Additionally, using logarithmic Fibonacci extension levels can be very useful for assets that exhibit logarithmic growth. Hence, logarithmic levels have been calculated in this indicator.
   

Some Tips

• The emotional states represented by NUPL values can vary depending on whether the market is in an uptrend or downtrend. The default settings of this indicator are calibrated for uptrends. Notably, when the bar colors shift to red or black for the first time, it may indicate a potential pullback.
  
  
• BTCUSD price often demonstrates a recurring pattern when interacting with the 350DMAx2 level. Historically, the first contact typically triggers a pullback, often down to the 350DMA. This is frequently followed by a breakthrough of the 350DMAx2 on the second attempt, a behavior observed in past market cycles.
  
  
• To be convinced of the usefulness of logarithmic Fibonacci levels, please observe the ATH level from 2021. For current levels, set the lookback value to 500 when using a daily time frame or 100 when a weekly time frame is selected.