TitanSwap Monthly Report November
We can see that at the end of November, the Bitcoin price fell from new all-time highs. From a high of $66,281, the price fell to a low of $55,705 (it has continued to move lower since December and is now at the $40,000 bracket). The previously quiet bullish trend came to a grinding halt. While prices remain below the new highs, investor sentiment remains divided and Bitcoin stakeholders are actively adjusting to the new market information.
Evaluate Momentum, Supply, and Sell
In general, as prices climb to new highs, we expect bullish impulses to be followed by investors launching chains of profit-taking peaks, which is typical of any bull market. As profits are realized, the probability of a macro top forming increases.
Therefore, an increase in realised profit and realised market value usually indicates：
· The increase in liquidation margins is an estimate of selling pressure and requires increasing demand inflows to absorb selling pressure in order to maintain sideways or upward price momentum.
· These buyers of Bitcoin (i.e., short-term holders) have a higher cost base, making them more sensitive to short-term price movements.
Prior to the price drop, the 28-day market realisation gradient had shown the momentum of the price crossover starting to fade. This feature was also seen in May when prices fell sharply, and in September before the coin price failed to hit $50,000 on several occasions. As prices hit higher, the momentum behind each high has declined, creating a bearish bias.
As the price falls, the profitability of supply as a percentage indicator can help us gain insight into the profitability and cost base of market participants, as well as the supply of bitcoin. The takeaways are as follows：
· 15% of Bitcoin in supply, they have an on-chain cost basis above $57,000.
· A relatively top-heavy distribution is reflected among Bitcoin holders, and by comparing past data, we can determine that the percentage of supply that is profitable is between 85% and 90%.
· The price is currently located in the 85%-90% bull/bear transition zone. Historically, if prices do not recover to higher levels within a reasonable timeframe, a 15% supply at a loss would be sufficient to generate a reflexive downside.
Narrowing the Scope: Considerations for Recovery
The price fell and STHs were actively involved in both actions, taking large profits at the highs and selling at break-even near the lows.
We will now look at the performance of STH holders through the STH MVRV ratio and the STH realized price. Similar to the STH SOPR, these metrics have historically been a signaling tool to gauge market conditions and sentiment by tracking both the bitcoin price and the cost base of STH. These indicators provide the following information: STH MVRV value = 1 represents a typical bull/bear divide. It indicates that prices have returned to the STH’s on-chain cost basis, a price level that STHs typically try to defend in bull markets. Conversely, in bear markets STHs typically sell bitcoin at their break-even price, creating resistance. The Sell Volume Age Band indicator identifies the age of the bitcoin that dominates the flow on the chain on any given day. With the help of this metric, analysts are able to determine when and where long-term holders (i.e. those who are most persuasive) are selling their bitcoins. While this tool does not necessarily pinpoint the top/bottom of the price, it can indicate when the process of profit-taking or accumulation has begun. This indicator can also be used to track the sentiment of various investors.
As an example, in late 2020/early 2021, sustained selling of coins older than 1 month (>5% of daily bitcoin on-chain circulation) starts in November 2020 and ends in April-May 2021. Since bottoming out at around $30,000, Bitcoin has had one SVAB spike to $40,000 in August and then over $60,000 in October.
Since then, the value of SVAB has recovered to 2.5% of daily trading volume, suggesting that the old coin is becoming more and more sedate, especially during price pullbacks. This could reasonably be interpreted as long-term holders reducing their selling and therefore more likely adding to their positions rather than leaving them.
Regardless of the product, maintaining long-term robustness is one of its key operational objectives, and continued investment at the technology level is its main driver, although the impact may not see a clear return in the short term, but rather a more solid form of building barriers in the long run. A period of changing market conditions is a better time to groove on R&D. We think TITAN should perhaps not stick to a single form of a platform, but evolve and evolve in a more diversified direction, and NFT games and social look like a good entry point to try.