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Elon Musk’s $44bn buyout of Twitter certainly helped crypto at the start of the week, but now it is time for heavyweight US tech giants to potentially impact bitcoin.
Amid a regime of high correlation to tech and rising interest rates, any surprises in corporate earnings from prime movers of the NASDAQ/tech will influence bitcoin.
In general, 2022 has had a noticeable bias for outflows: 62% of days have seen net outflows year to date.
Longer term, the 30-day change in the exchange balance reveals fluctuations in the supply held on exchanges month on month.
Futures open interest is trending down – it is currently $14.9bn, down 3% and 5% over the past seven and 14 days, respectively of this comes from perpetual futures contracts.
However, they are in slightly negative territory so leveraged traders are paying a premium to keep open short positions.
The year has been choppy for crypto so far with numerous headwinds including increased regulatory pressures, Fed tightening, and increased tendency to trade like a risky asset amid inflation shocks.
Consequently, if the trust trades at a premium to BTC prices, it may imply ‘excess’ demand from institutions, but ‘excess’ supply if it trades at a discount.
Conversely, holding it in liquid form would suggest investors are bearish, as they prefer being able to sell easily.
Exchanges set funding rates to prevent a lasting divergence in the price of the futures contract and the underlying since perpetual contracts have no expiry date so never settle in the traditional sense.
We can categorise HODLers by the length of time they have held BTC.
So, we could have a situation where the PSIP is low – that is, a low share of supply is in profit – but the NUPL could be high if the size of those profits is large.
If SOPR is above one, investors in aggregate have realised profits, while below one means they have realised losses.
The reluctance of investors to sell and realise a profit may be because they believe the price will increase further, which would be bullish.
A measure of the complexity of the problems and so the computing performance required to solve them is the hash rate.