Chief on-chain analyst James Verify, popularly often referred to as Checkmatey, recently delved into the intricacies of Bitcoin’s market dynamics, providing an in-depth on-chain knowledge analysis that gently sheds light on the forces that drive Bitcoin costs. His latest insights highlight an interval he describes as “quiet and trending,” suggesting a solid underpinning regardless of important sell-side pressure and shifts in volatility.
Bitcoin follows the staircase-step-rally-consolidation-rally pattern
Since December, Bitcoin has experienced significant sell-side stress, with more than 1.5 million BTC on offer. “About 30% of this came from GBTC, but the rest of it was pretty cool revenue taking,” Verify explains. Regardless of such significant gross market sell-offs, Bitcoin has shown resilience with a relatively modest correction of just -20%. This implies that the basic support ranges for Bitcoin are stronger than surface level market actions might indicate.
A placement facet of Verify’s evaluation is the transformation in Bitcoin’s volatility profile. “The overall realized volatility profile for Bitcoin is half of what it was in 2021, and 3x smaller than 2017,” Verify says. This pattern indicates a rising maturity throughout the Bitcoin market, reflecting its evolution into an extra steady asset over time compared to its early years.
Verify contradicts the standard narrative surrounding Bitcoin’s volatility: “What many people overlook, however, is that Bitcoin is volatile to the upside. Volatility to the top is nice!” He claims that the current increase in volatility is reasonable and means that the market is still in the early stages of a bull run, slightly approaching its end.
An important piece of software in Verify’s evaluation is the Short-Term Holder MVRV (STH-MVRV) ratio, which it uses to gauge market sentiment and phases. In response to Verify, this ratio continues to find support at 1.0 and resistance at 1.4 through steady uptrends. Stability is maintained as long as the ratio remains within these limits. “Only when it breaks above this ceiling do problems develop into unstable,” notes Verify, which could signal a transition to bearish situations.
Regardless of the selloff that set Bitcoin up to $57k, Verify notes that it did not significantly hurt the profitability of short-term holders. “The magnitude of unrealized loss was very much in line with bull market corrections, calming fears of a top-heavy market.”
He additionally emphasizes that a number of the native high consumers panic offered their Bitcoin at the lows, a movement that he interprets as useful for the correction part, which serves to stabilize the market by shaking out weak palms.
By raising its valuation, Verify refutes criticism that Bitcoin’s volatility makes it a much less viable asset. He factors a chart comparable to Bitcoin’s 30-day volatility against top-performing US stocks, showing that Bitcoin’s volatility is properly within a manageable variation.
In addition, he discusses the decrease in realized volatility of the SPY index, attributing it to the “out-of-size efficiency of the Magnificent-7”, which is offset by the weaker efficiency of the opposite parts.
By highlighting the structural elements of the current “quiet and trending” market share, Verify offers a refined perspective on how Bitcoin navigates its maturation path, balancing between its speculative origins and its potential as a mainstream monetary asset.
He concludes: “Overall, the Bitcoin uptrend in 2023-2024 looks quite structured, following a stair-step-rally-consolidation-rally pattern. Nevertheless, because the charts above are present, volatility tends to by opting for a consolidation, and this can result in instability.
At press time, BTC was trading at $66,288.
Featured image created with DALL·E, chart from TradingView.com
Chief on-chain analyst James Verify, popularly often referred to as Checkmatey, recently delved into the intricacies of Bitcoin’s market dynamics, providing an in-depth on-chain knowledge analysis that gently sheds light on the forces that drive Bitcoin costs. His latest insights highlight an interval he describes as “quiet and trending,” suggesting a solid underpinning regardless of important sell-side pressure and shifts in volatility.
Bitcoin follows the staircase-step-rally-consolidation-rally pattern
Since December, Bitcoin has experienced significant sell-side stress, with more than 1.5 million BTC on offer. “About 30% of this came from GBTC, but the rest of it was pretty cool revenue taking,” Verify explains. Regardless of such significant gross market selling, Bitcoin has shown resilience with a relatively modest value correction of simply -20%. This implies that the basic support ranges for Bitcoin are stronger than surface level market actions might indicate.
A placement facet of Verify’s evaluation is the transformation in Bitcoin’s volatility profile. “The general realized volatility profile for Bitcoin is half of what it was in 2021, and 3x smaller than 2017,” Verify says. This pattern indicates a rising maturity throughout the Bitcoin market, reflecting its evolution into a more stable asset over time compared to its early years.
Verify contradicts the standard narrative surrounding Bitcoin’s volatility: “What many people overlook, however, is that Bitcoin is volatile to the upside. Volatility to the top is nice!” He claims that the current increase in volatility is reasonable and means that the market is still in the early stages of a bull run, slightly approaching its end.
An important piece of software in Verify’s evaluation is the Short-Term Holder MVRV (STH-MVRV) ratio, which it uses to gauge market sentiment and phases. In response to Verify, this ratio continues to find support at 1.0 and resistance at 1.4 through steady uptrends. Stability is maintained as long as the ratio remains within these limits. “Only when it breaks above this ceiling do problems develop into unstable,” notes Verify, which could signal a transition to bearish situations.
Regardless of the selloff that set Bitcoin up to $57k, Verify notes that it did not significantly hurt the profitability of short-term holders. “The extent of unrealized loss was very much in line with bull market corrections, which calmed fears of a top-heavy market.”
He additionally emphasizes that a number of the native high consumers panic offered their Bitcoin at the lows, a movement that he interprets as useful for the correction part, which serves to stabilize the market by shaking out weak palms.
By raising its valuation, Verify refutes criticism that Bitcoin’s volatility makes it a much less viable asset. He factors a chart comparable to Bitcoin’s 30-day volatility against top-performing US stocks, showing that Bitcoin’s volatility is properly within a manageable variation.
In addition, he discusses the decrease in realized volatility of the SPY index, attributing it to the “out-of-size efficiency of the Magnificent-7”, which is offset by the weaker efficiency of the opposite parts.
By highlighting the structural elements of the current “quiet and trending” market share, Verify offers a refined perspective on how Bitcoin navigates its maturation path, balancing between its speculative origins and its potential as a mainstream monetary asset.
He concludes: “Overall, the Bitcoin uptrend in 2023-2024 looks quite structured, following a stair-step-rally-consolidation-rally pattern. Nevertheless, because the charts above are present, volatility tends to by opting for a consolidation, and this can result in instability.
At press time, BTC was trading at $66,288.
Featured image created with DALL·E, chart from TradingView.com
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
UnCirculars – Cutting through the noise, delivering unbiased crypto news
