On the alert | on-chain forecast

Another short update from Willy Wu, just a couple of days after the previous one, on the changing situation in the bitcoin market.

I am now on high alert and waiting for the next big move. This is a short update to keep you updated as the market continues to show what looks like early signs of a sea change.

Summary as of March 1620 (current price ~$,8 thousand):

• Structural takeaways:

  The return of on-chain demand is now confirmed and, more importantly, the long-term futures markets are showing the first signs of a sell-to-buy transition. Data from both on-chain modeling and futures markets signal that we are in the lows of the market macro trend amid growing demand.

• Price Expectations: continuation of fluctuations in the range with limited downside movements in the coming days. If the building structure continues along with demand in the futures markets and a decrease in volatility, then in the next couple of weeks there is a high probability of a breakout upwards and the end of the bear market. But this still needs to be confirmed by new data that will arrive in the coming days.

Please observe prudence!

Please do not make trading decisions based on these predictions assuming perfect accuracy behind them. Everything forecasts are probabilistic. Short-term market movements are subject to unpredictable events and market randomness.

Control risks, respectively.

Longer-term forecasts tend to be more reliable as it takes time for the full effect of fundamentals to develop.

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First signs of proper demand in a typical bottom range

As some of you may remember from the previous post, I was expecting confirmation that the surge in on-chain buying ($1.2 billion in BTC) reflects genuine demand (and not a transfer between wallets of a large organization), as well as weakening sales in the futures markets.

Now I can confirm from a dialogue with Glassnode analysts that the surge in demand from hodlers is not a mistake, it really happens. In addition, in the last 2 days there was the first surge in demand in the futures markets. Under normal circumstances, this wouldn’t be that important, but futures prices relative to the BTC spot markets are in an area where you can expect a bottom to form, so it’s worth looking into (see chart):

Supply and Demand in the Bitcoin Markets

Continuing this thought, the chart below reflects the ratio of on-chain supply and demand in the form of an oscillator. The last time this indicator was at current lows was at the very beginning of a bull market 2021 of the year.

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