Long-Term Bullish, Short-Term Cautious

ByteTree Market Health Update; Issue 49

Price is ahead of events

While it has been exciting seeing Bitcoin perform at a time of general stress in financial markets, you can have too much of a good thing. The price surged 20% ahead of the 30-day simple moving average, which is probably not a great time to open a new position. These things can cool off quickly, and I hope they do. What I want to see is a lasting trend as short-term spikes rarely last.

Bitcoin has raced ahead of trend

High valuations are a headwind

Rarely is network value so far ahead of network activity

Network Demand Strategy

The network demand model holds at 5 out of 6. Velocity remains the only indicator on the wrong side of this bullish move. The problem with velocity is a similar argument to the problem with the NVT ratio; an adjustment is needed to allow for inactive coins. But as a concept, an active Bitcoin is a valuable Bitcoin, and velocity is useful in measuring this.

Summary

The 5 bullish remaining signals are unlikely to turn down soon, and the risk of a bear market remains low. Price volatility is low, and the network is growing, which are also healthy signs. The cautious discussion merely suggests that price is ahead of itself, but the longer-term outlook remains very bullish indeed.

Applied data for digital asset investors. ByteTree provides real-time data, fundamentals, technical and deep blockchain market analysis for Bitcoin, and more.

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