Hitting the Reset Button

Dec 9, 2021 • 6 Min Read

Key Takeaways

  • We see Bitcoin’s recent price action coupled with a lack of substantially leveraged positions as an encouraging sign.
  • Hash rate has surged since Friday’s washout, pointing toward a network of miners that feel optimistic about the near-term trajectory of the BTC price.
  • SOPR indicates that the majority of selling pressure is coming from short-term investors who lack conviction in Bitcoin’s current price trend.
  • MVRV has decreased, implying a higher network cost basis, which we view as positive for Bitcoin’s near-term potential.
  • Bottom Line – By no means was last weekend fun, but volatility is a feature and not a bug for Bitcoin. While we cannot rule out some near-term consolidation, we believe the on-chain and macro setup still looks bullish through year-end and into Q1 for Bitcoin. Additionally, we still see the potential for Ethereum outperformance and view our altcoin baskets (highlighted in last week’s analysis) as an opportunity for those venturing further out on the risk curve.

Open Interest Remains Subdued

To recap, Bitcoin’s price dropped precipitously on Friday evening in the wake of cascading liquidations of leveraged positions across multiple exchanges. According to data from Coinglass, on Friday, December 3rd, over $2 billion...

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