After a period of collapse in the crypto market, there has been some relief in the last seven days. But CryptoQuant analyst DanLim said it is possible to speculate whether the market is driven by whales or retail investors by looking at the distribution of UTXO values as reference prices rise or fall. During the recent rebound of the crypto market, UTXO values are distributed as follows: 10-100 BTC: no change 100-1 KBTC: decrease of 1K-10 KBTC: decrease of more than 10KBTC: This implies that the market rose because whales with more than 10, 000 BTCS bought BTCS, suggesting that the recent rally was driven by market makers rather than retail investors. Meanwhile, DanLim added that it was unclear whether market makers were buying to kick-start a bull market or a temporary rebound.
In fact, everyone is talking about ups and downs, and most of them haven't left the cryptocurrency market despite experiencing crashes. They're just waiting for the market to bottom out. Bottoms are very difficult to predict, but we can see how the crypto market is performing near the bottom by some indicators.
On the macro side, nearly six months into a bear market, you probably know that cryptocurrencies are in a bear market basically because of the Federal Reserve. The Fed has been aggressively raising interest rates to lower inflation, which has sucked trillions of dollars out of the economy as debt has been paid down while interest rates have risen. The Fed's monetary policy has not only affected stocks, but also the cryptocurrency market.
Now, however, most investors are prepared. With June's high inflation rate of 9.2%, the Fed is likely to raise rates by 75 or 100 basis points. But the action may not lead to a sell-off, as most traders had expected it. And with the Fed expected to raise rates by 75 basis points, officials are wary of raising rates more aggressively.
Furthermore, the best index to describe market sentiment in the cryptocurrency market is the Fear & Greed index. Last month's low of 6 indicates that most investors are very fearful of the market. It has since recovered and now shows a number of 30, meaning that while the market is still in "fear" territory, it is not "extreme fear" as it was last month. Many people will start to feel more comfortable investing in larger amounts, which could further boost the crypto market. On-chain data shows that the number of addresses holding more than 0.1 BTC has reached a record high.
Google Trends is a useful search trends tool that shows how often specific search terms enter Google's search engine. Google Trends has been used by many financial analysts over the past few years to try to catch trends early or predict the future direction of an asset class. Correctly interpreting the data provided by Google Trends is critical, especially in the financial and crypto worlds. For example, when searches for the keyword "bitcoin" decrease, it means fewer people are searching for bitcoin, which means interest in bitcoin is slowing down.
Looking at recent Google Trends, the keyword "Crypto" is at its lowest point in a year. That means fewer people are searching for encryption and related terms on Google. With searches for "Crypto" at their lowest in a year, so is the phrase "How To Buy Crypto". That means most people have been buying at record prices in November, and fewer are buying at discount prices now. Historically, when overall interest in the crypto industry has reached a low point, prices have slowly recovered because it has reached a point where there are no sellers.