Nearly 75% of Bitcoin holders are in profit, but overall, Bitcoin and Ethereum are still looking “bearish” across an eclectic variety of indicators, according to a new analysis by crypto data analytics company IntoTheBlock. This is bearish not only in the sense of price action, but also as a measure of public interest and usage of those public blockchains, as well as concentration of wealth on the respective networks.
(Bitcoin sentiment; source: IntoTheBlock)
Specifically, four metrics are measured for each coin: Net Network Growth; Concentration; “In The Money”; and Large Transactions. The details of these measures are elaborated in a pitch deck and webinar found here. It is important to note that these metrics are just a small sample of the plethora of metrics they use in their more detailed reports.
(Ethereum sentiment; source: IntoTheBlock)
Those In Profit Falling
The “In The Money” metric measures the percentage of total holders of an asset that have made profit on their investment, versus the percentage who have taken a loss at current prices. Although Bitcoin holders are still about 75% up on their investments, the data seem to indicate that this level is falling for both Bitcoin and Ethereum.
("In-The-Money" metric from IntoTheBlock)
In the Net Network Growth section, IntoTheBlock track the number of Bitcoin wallets that have held onto their coins for less than 30 days. We have seen from other crypto analytics reports that long-held coins, or high network “age,” is a leading indicator of extended price rise.
(Bitcoin wallets over 30 days old declined with price: IntoTheBlock)
On IntoTheBlock's time scale, this could just be a bit of noise, but we apparently still see the correlation on even daily or weekly time scales, that more holding buoys price.
Concentration on the Bitcoin network is apparently growing, which IntoTheBlock consider bearish. They explain their reasoning that more wealth concentrated on a network is riskier than a more distributed one. This assessment dovetails with a number of chart analysts’ readings of the Bitcoin market, that it has been in an accumulation phase - and apparently accumulating into fewer hands.
As for the Large Transactions category - the only bullish one - IntoTheBlock classify single transactions worth over $100k to be large, non-retail transactions. They associate an increase in large transactions with an increase in price, especially on the Bitcoin network, and are also developing the methodology to turn the category into a leading indicator.