Hello there! 👋🏻
Only about ~5% of crypto investors are professionals.
The rest of us are retail investors with busy lives and can't devote 100% of our attention to what's happening.
We unconsciously use an "attention funnel" where we filter out most data and only retain the most impactful.
That's why, in this post, I want to show you 5 pieces of data that many overlook about the market, which can give you a more accurate outlook than just the red numbers from the last few weeks:
1️⃣ The M2 Money Supply has turned positive
M2 includes available cash and short-term bank deposits in the US. This change indicates an increase in the amount of money in circulation. Generally, this is a signal for investors to focus on assets like Bitcoin, which tend to perform better in periods of high inflation.
2️⃣ Wild corrections are normal in crypto
Corrections ranging from 5% to 70% are not uncommon in a Bitcoin bull market. Remember this is the most volatile and wild market of all.
As I always tell you, think long term. 🧠
3️⃣ Historically Expected
Generally, immediately after a halving, we don't see major rallies. In the past, we've seen a "small" rally before the halving, followed by poor performance until it picks up again in the following 8-12 months.
4️⃣ Fear & Greed Signals
The young and narrative-driven crypto market is very sensitive to emotions.
The "Fear & Greed Index" is a good indicator of market direction.
When the index reached 90 last month, the current decline began.
It is currently at ~57, a neutral level which usually indicates that a bottom is near.
On January 24, the index was at 48, and in the following six weeks, Bitcoin went from $39K to $73K.
5️⃣ Fundamentals Remain Strong
The beauty of blockchain is its transparency, allowing us to see exactly the state of it at all times. Fundamentals like:
Number of active addresses
Transaction volume
Deposits/withdrawals from exchanges
Number of validators
Amount of ETH in staking
Are all positive and continue to progress to a greater or lesser extent.
This indicates that often the market (price) does not match the real value being created.
I hope these metrics help you have a clearer view of what's happening beyond the prices and bearish news.
If you have any questions, I'm here to help.
Have a great week!
See you next time! 👋🏻