I think that as long as the dry powder is going up here with top exchange addresses just holding more and more stable coins, it's indicative of the buying power clearly being ready to shoot us right back above one hundred K, and the limited cell power right now from Bitcoin is only going to strengthen that argument.
Welcome into the Thinking Crypto Podcast. I'm your host Tony Edward, and my guest today is Brian from Santiment and folks, you all know we're going to cover crypto metrics. We're going to do a deep dive on Bitcoin, XRP and all coins to give you the lay of the land and what's happening using data. Brian, great to see you, Good.
To see you, Tony. We're back after I think three weeks off here together, but I'm excited to talk about lots of different price changes. The party has at least temporarily come to an end, and I think that's changed the outlook from.
A lot of the retail traders out there absolutely, And we saw incredible price run ups were Bitcoin and many all coins, and now we're having that pullback, cool down phase. So we want to look at the data to see what's happening. You know, what was your first thought or impression of bitcoin cracking one hundred thousand dollars?
Yeah, I mean, I think because of my time spent at santiment, my first thought was, honestly, this is really cool, it's super historic. Now, how greedy is the crowd coin? Again?
Right?
Because once they start to show euphoria and a lot of fomo, that's usually when the party comes to an end. So we saw a little bit of that, which I'll show in the graphs here in a moment, but it wasn't to an extreme degree, not like we saw in like twenty seventeen or twenty twenty one. So now that we've fallen back down, now my opposite question is is the crowd get getting too scared? And if so, we can be bouncing right back up because prices move the opposite direction of crowds expectations.
Absolutely, So how about you show us the charts and we can start at looking at the sentiment around when bitcoin hit one hundred k and what it is now with this pullback.
Let's do it all, right, So just looking at the past week here, So the obvious story that pops out is price is definitely corrected. Bitcoin's actually about right where it was a week ago, actually up about a half a percent, believe it or not. Because we have that early dip last week where we got to the low ninety four k's almost the exact same thing happened this week. We got to like ninety four point three, ninety four
point four. Currently at the time of this recording, we've actually bounced a little bit back, just shy of ninety six k. But most assets, especially the ones that have been really partying hard, a lot of those og large caps like XRP, Cardono here, they're both down about twenty percent, Stellar another one. These were kind of the big three that a lot of people were noticing during those like five x six x breakouts that each of them had
throughout November. So call it regression to the mean. But a lot of those same assets that we're doing really well are now kind of letting the math be the math and coming back down a little more than the rest of the ald coin pack at this time.
Yeah, that makes sense. Some of these had incredible run ups and really many parabolic run ups where you might see something like that near to top, but we're not near to top, you know. Based on different metrics, and this pullback I think is very healthy, very necessary for us to continue to go to higher prices. So I know there's a big leverage flush out and are you seeing some fear in the market, you know, with this significant pullback.
Yeah, So we can talk about that a little bit. I pulled up this chart which I find pretty fascinating. It's measuring the amount of mentions of buy buying or bought with the combination of bitcoin or BTC in it. So naturally you would think when greed is starting to get really prevalent, these bars are going to go up. When it's starting to go down, the bars go down.
And that's essentially what we've been seeing. We kind of peaked, if you you know, don't include the Trump pump that was going on in mid November where everyone was just very euphoric and got rewarded for that euphoria. We eventually hit this point here where on December fifth, people were enthusiastic about buying the dip. They got like a mini bounce right here that got them excited. And then you can see how the buy calls for bitcoin as well, by the way, as ethereum and mean coins, which are
here in red and yellow, respectively. They're all kind of shrinking down now after really getting high during this dip in late November, one more hurrah in late December, and it looks like we're kind of at the most fearful point that we've been at for about a month now. It's funny, you know, it's smart investors. They look for fear and blood on the streets to buy. That's the time they're not tweeting about it, but they're actually doing it.
But the real retail crowd will tweet out about buying when the things when the price is pumping, which is the wrong time exactly. It's funny how quiet the crowd is in terms of buying when the price is at fifty or sixty K, like it was what three months ago, and then how vocal they are when it's at one hundred K. You always scratch your head and you go, why didn't you say that before? You could have doubled
your money. So it's fascinating the psychology of crypto and even advanced traders, and you know people who look at charts all day like you and I. I won't speak for you, but for me, like even I have that natural inclination to go like, oh, prices have been going up now, therefore they're more likely to continue going up as opposed to expecting prices to go up when we're on that huge downswing, especially when it's been going on for so long, like back in twenty twenty two, right
before the FTX collapse and all that stuff came out.
Yeah, and it took me years to unlearn that herd mentality, you know, watching financial news and to look at the charts and to do the opposite of the herd. And was it challenging, of course, But I've been rewarded for doing that, buying the blood, buying the fear. So come December twenty twenty two, I was buying bitcoin at sixteen seventeen K early January twenty twenty three. So I say that not to boast, but to help others understand this is how this is investing. It's not running with the herd.
They're usually coming in with that dumb money crowd, which.
Yeah, that turn up, but it is what it is. And congrats, by the way, that's incredible that you were one of the few that was bind during that time. But I was going to say the blood in the streets saying you know that Warren Buffett kind of made famous in the traditional equities markets. There's a reason for that, especially in crypto. There's a reason why people who buy when there's blood in the streets tend to get rewarded. For one, there's the simple math explanation where what goes
down usually goes up. What goes up usually goes down, and crypto is obviously here to stay. Anyone who doesn't believe that, who's watching this video, you know, watch a few videos and read a few books, and I guarantee you you'll find something that eventually changes your mind on that. But when you do see a lot of blood in the streets, right, the vocal majority, they're not the whales.
Those are the retail traders who are selling off, running around like chickens with their heads cut off, explaining that bitcoin's dead and you should believe them and follow their lead and all this. Well, who's buying those coins, right, They're not just disappearing when they're selling them. They're going
into the large wallets, which might be exchange wallets. Yes, but it's also a lot of whales that just have these huge limit buys that are being fired off because of all the small retail wallets that are selling off their fractions of coins hundreds or thousands or tens of thousands at a time, and making the whale wallets richer. And then the whales, when necessary, use their heavy hands and heavy bags to push prices up further and punish
all of the people who are capitulating. And that's kind of the psychology behind it and the real explanation as to why prices typically move the opposite direct of the crowd's beliefs at any time.
Absolutely so, speaking of whales, can we take a look at what whales are doing as far as accumulation and even supply and exchanges and so forth.
Totally so. One of my favorite charts that I think we almost always go over on this call is just the overall collective holdings of any wallets that are ten BTC or greater. It's obviously a very widespread way of looking at the supply distribution a bitcoin, but it gives you a good understanding between all the exchange addresses and all the real sharks and whales out there that are accumulating or dumping at any time, getting an idea of
what they're doing. And how much it correlates with prices. It's pretty fascinating and it's always been the case, and you can see especially right around November fourth, this was literally the twenty four hour period that Trump had been elected right here, and you can see how they really just started accumulating aggressively right as that news broke. Now
it is slowing down a little bit. In fact, when I refreshed this like ten hours ago, I was actually seeing the first downtick in about two months since like October fourteenth. That would be the last time we saw an actual like drop like way back here tenth or so. So now we're up here, it's up again, meaning that as of today, this current twenty four hour cycle, there's actually started to be a little more accumulation once again.
Perhaps prices going below ninety five k was enough to get whales and sharks interested again, but regardless, we're not quite seeing the same level of accumulation. It's just flattening out a tiny bit. So if you're worried that we're about to see a huge collapse, one thing that kind of validates that that probably won't happen is when the whale whiles continue to go up collectively.
Yeah, that makes sense because we saw a lot of long term holders were selling bigcoin at near one hundred thousand, and then of course you've crossed one hundred thousand, you touch one hundred and three, there's going to be some folks who are selling, whether it's traders or whoever it else. And I think there were showing some wallets that have been around for eight to ten years, right, people have been holding, they haven't moved it, and there was some
distribution there, so it makes sense. But to your point, with this pullback, many of these whales could start buying the dips so to speak, and holding for maybe the final leg of this bullmarket.
Yeah, you touched on literally the next point I wanted to make, and that is exactly how the dormant, older stagnant coins are looking right now. And this is an extremely good boat of confidence because this line here that will make a little more prominent here an orange. It indicates the average a in which coins have been sitting
in their wallets. It's called mean dollar invested age. Sentiment's been using it for about four or five years now, and basically the theory that's been back tested and proven time and time again is that when this line moves down and coins get younger, it's indicative of older large shark and whale wall. It's moving their stagnant coins back into circulation, thus creating more network activity and allowing a bull market to essentially bull to allow it to come
to fruition and continue. And we've seen over history, if I go back to like twenty sixteen, we'll go back eight years here in every bull cycle. I know these green bars representing the price or small way back here, but you can see how the mean dollar invested age way back in twenty sixteen started to move down and continued all all the way until the bull market was just ending here in mid December twenty seventeen, and then all of a sudden, you see it start to rise.
This rise indicates that these stagnant coins are becoming more and more stagnant again, and then we see the price doing this and going down over time until we see another poolmarket mini one right here in May twenty nineteen, and then another one in late twenty twenty as COVID was really starting to invoke a ton of fear in the markets, and then we kind of went on this long stagnant cycle here until October November of twenty twenty three, and ever since then. You can see how the price
has exploded. If I hold down shift and I just go to the right, you can see on the left top left side of my screen the ten plus BTC wallets since mid October of last year have accumulated three hundred and twenty five thousand bitcoin and the mean dollar invested age has dropped just about one hundred and ninety eight days on average, meaning during this bull market stretch.
If you want to call this fourteen month cycle a stretch of bullish momentum, which I think you should, the decrease or the age in which coins have been sitting in their wallets has decreased decreased by almost one third, which is just a ton and helps validate that we are still in a bull cycle long term.
This is such an interesting metric. I need to get this chart from you to bookmarket definitely telling you just see it from the macro and what's happening now in regards to supply and exchanges. Are you continuing to see that decline as well?
Yeah, it's looked pretty good. It's little zoom in a little bit here just to the last three months, But overall, it's it's business as usual. Bitcoin just continuing over time to move off of known exchange wallets and into cold storage, which is more a good thing than a bad thing. The bad argument is that if they're sitting around for a long time, they can't circulate and it tends to create stagnation, whereas if they're on exchanges it implies that
there's going to be a little more network movement. But overall, the reason it's good is because when there are less coins on exchanges, there is a decreased chance of future mass selloffs, especially by whales, who make up a very large chunk of this supply in exchanges, as you would imagine, So it's continuing to move down. If we go back to around, let's just go exactly three months ago, the supplant exchanges has dropped by about one point four percent,
which is great. And on top of that, the tether and USD coin supplies on exchanges the top two stable coins in crypto by market cap. They're continuing to rise. Usdc's kind of being a little choppy right now, but you can see tether and red here since just November fourth, the night before Trump was elected. It was, it was sitting at twenty five point three five billion on supply of coins on exchanges, and now it's at about forty point seventy nine billion. And this, by the way, is
supply held by top exchange addresses. So for stable coins, we're specifically looking at just the ten largest wallets and how much they're holding, so you can see just what a massive increase it's been for the tether and supply and USD coin top exchange wallets, you know.
So I'm assuming as soon as we start to see an updick V shaped recovery, if you want to call that brain, it's gonna we gotta start sounding the alarms a bit, right.
Yeah, I think. I think that as long as the dry powder is going up here with top exchange addresses just holding more and more stable coins, it's indicative of, you know, the buying power clearly being ready to shoot us right back above one hundred K, and the limited cell power right now from Bitcoin is only going to strengthen that argument. So yeah, I'm with you.
Wow, this is why I love the data. Man. No feelings, no emotions, What is happening? What are the whales doing? It's it really tells the clear story of what where we're at and what we can anticipate. Now, let's talk about XRP because we've been seeing incredible price movement. I don't know what's going on this cycle, but there's a
ton of retail interests. You look at Google trends, I'm seeing XRP being mentioned on random YouTube channels that have they're not cryptospecifics, so there's a lot of retail hype here.
Yeah, it's funny what a crazy thirty day run will do. Even after this little retrace here we've seen it's still up about three hundred and twenty nine percent in the past month from its top roughly about eight days ago. The price is down about fifteen and a half percent.
But just between November twenty fifth to December tewod to call it about a week, give or take a day or two, it went up more than double just in this one little stretch here, And you can see how the top really was precisely called by the amount of transaction volume here, and we can even see how it's matched. We make sure these are one day candles here, it's matched by the high spike and daily active addresses and circulation.
This wasn't necessarily like this massive warning sign. I think we all can agree that XRP, just like any other ald coin, is still going to be at the whim of Bitcoin being able to stay stable itself. And this is of course when Bitcoin started dropping also. But xrp's utility was showing just tons and tons of fomo signs.
So there's a difference between like a gradual level of growth like we saw back here, and then just a sharp, like reactionary spike from all the fomoers who are suddenly moving XRP as a result of just the price instead of the fundamental opportunities that XRP provides that other all coins don't.
Interesting and one other coin that was really going nuts was dogecoin as well. I think it was early November if I'm not mistaken or I remember the timeline, but dogecoin was really rallying hard the same thing. You had a lot of retail being drawn in because of its price movement.
Yeah, I mean there were a few reasons. Meme coin mania was going nuts as Bitcoin's price was beginning to climb, and every time there was a big step up or a new milestone made from Bitcoin a lot of that profit redistribution went straight into meme coins, and of course Doje being the king of the memes in terms of market capital least, it benefited greatly, especially after Trump was elected. As you remember, mister Elon Musk is a big doge coin fan, at least he memes about it a lot
and talks about it a lot. So with him having his presidential candidate win the election, I think a lot of people had increased confidence, not just in crypto, but specifically in anything that Musk has been promoting over the last couple of years, and dose cooin was one of the biggest beneficiaries of the election result, going from was it about yeah, fifteen cents here in early November to
around thirty two cents in late November. Obviously, it's been followed by many other meme coins that have done great as well. I've seen some five x and ten x returns from meme coins we had never heard of before just during the month of November. So those was kind of just a representation of the meme coin euphoria and
how crazy it had been. And you can see, just like with XRP, a big spike in circulation signaled the top here in November eleventh, and then it settles down, we get a rebound, and then daily active addresses goes off and then we kind of see the last top that we ended up seeing. So look for any more utility spikes here as a clear sign that the fomo is starting to become a bit too much. But as
of now it looks pretty healthy again. So I think Doje and the rest of the meme coin options out there are waiting for Bitcoin to just pick up steam once again so it can get rolling again. It's else.
It's so interesting how cyclical this is. And to your point, this all follows Bitcoin, right, And I often tell people about that, watch what bitcoin's doing and use it as a measuring stick to get an idea where we're at and where we're going. So, if Bitcoin's going to do its next leg up, a lot of that liquidity will eventually be rotated to all coins and then you got the stable coin supply, it's going to hit some of these all coins as well.
Exactly. Yeah, Bitcoin, just like it was doing fifteen years ago. It always starts the lead and then other coins will follow. There are occasional short term exceptions, but if you're regardless of whether you like or hate Bitcoin, then maybe you're only into all coins. You should still be watching Bitcoin for its signal to allow the rest of the markets to flourish the way they've been doing throughout most of this year.
Absolutely, I see you have here funding rates, and I don't do it liquidations yesterday exactly.
Yeah, So funding rates are kind of a sentiment measurement, at least the way I like to perceive it. It's the way people are really putting their money where their mouths are. So they may talk bullish or bearish about dose or any other coin on any given day, but this is showing their true level of interest in going long or going short and how many margin or leverage
positions are being opened on any given day. And especially over the past week or so prior to today, we were seeing quite a bit of greed toward dose coin in the ratio of longs compared to shorts. When there's more shorts, that's when you'll see these little red lines over here, and that's usually an indication that short liquidations could occur and cause prices to move up. The opposite happens when you see huge, huge long ratios compared to shorts, and
then the price moves down thereafter. Essentially, funding rates are always trying to get back down to even if it's too high. That means that lungs are literally paying shorts a premium so that they can benefit from prices moving up and up and up more. But that premium causes the ability for the price to move up in a more difficult manner. So essentially this is one of the primary reasons that you can benefit from going against the crowd.
If there's blood in the streets and they're literally trying to bet against dose coin, optimal time to buy. If they're betting in huge droves in favor of dose coin, it's at the very least a more advantageous time to take some profit than usual. I'll leave it at that.
Are you seeing the same type of pattern for bitcoin and XRP.
Yeah, let's take a look at both really quick. They they are fairly similar, give or take. You know, any
eight hour period might be slightly different. Xrps actually seeing more current lungs than than those so people are still quite confident, especially on bitmes, which is quite interesting here, just huge, huge lungs, more than we've seen throughout most of the year, going back to March is the last time we saw this high level of lungs compared to shorts, and Finance is not quite as extreme, but yeah, they're
both pretty long right now. And then switching to bitcoin, bitcoin's a little more on the neutral side because I think personally there's a little more rationality for bitcoin because it's not going up five hundred percent in any given month. It's more just a steady, you know, ten twenty thirty percent in a given month. Therefore, the lungs don't get quite as extreme. But yeah, on bidmes right at the top, you can see it was really starting to get high.
Let me make sure it's refreshed here. Yeah, bid mechs really high on this second, fourth and fifth really and then Finance right around the same time, and then it actually went up a little bit more and then just fell off and now we're kind of back at neutral. But yeah, XRP seems to be the one that's still getting quite a bit of undeniable. You know, Fomo, I don't care that the prices are going down. I'm still
going to along. I'm just going to buy the dip more and more, and that can get people in trouble sometimes.
Yeah, and I noticed some folks are looking at short XRP. I see a lot of people looking at to do that, and which I guess.
Yeah, I was just going to say, according to the data, there isn't enough evidence that that's making up the major majority of people. So maybe it's a small minority people saying that, but the data shows people are still overwhelmingly long toward XRP. Oh.
Yeah, so that's what I meant. Like, because they notice that they heard is so bullish and long, they're like, I'm gonna short this thing after.
That, parable right, Yeah. Well it's interesting because they sometimes they're going to say it, but they're maybe they're just trying to manipulate the crowd a little bit when they say things that they intend to do but don't actually do it. That's one of the really fun things about checking out, you know, what they're saying versus what's actually happening on exchanges.
Yeah, absolutely, Brian, let's a little let's wrap it up around the total all coin market cap, you know, if you can give us a view of that and what's happening there from maybe a sentiment standpoint.
Yeah, So if we look at just the overall numbers right now, the market cap among the thirty six hundred assets or so that we have is down about one and a half percent in the past, but volume is actually up. So this volatility that we're seeing is certainly causing more activity than we saw even during the crazy all time highs of last week, going from late November to early December, and I find that fascinating. So there
is definitely some interest in dip buying. And the other thing I can show is the well, actually, this chart two is just a quick representation of the amount of positive versus negative comments here in green versus red that I'm going back and forth on with my mouse across social media, and then this gold line indicates the ratio of those two metrics positive versus negative multiplied by the amount of discussions. So in short, when it's really high,
that's an indication of fomo. You can see, just while I'm highlighting this, there's a big spike right at the top here, big spike kind of at the top here. Yes, it trickled up a little bit more, and then this was a top as well, So you don't want to see arbitrarily anything above this line that would be an indication that we're seeing too much fomo. At the same time, you do want to see a lot of sentiment below
this line. Right now, we're smack dab in the middle and nobody quite knows what to think, and it's just causing bulls and bears to kind of have friction, and the panic sellers are getting scooped up by the dip buyers, and it's kind of just havoc at the moment. But I think eventually the crowd is going to start leaning
one way or another. If we see anything below ninety four, which seems to be the support level right now, that's when you can start to expect lines like these, which would be a very good indication that it's time to truly dip by and go against the crowd.
Interesting, it's interesting that we're stuck in that limbo or right in the middle. And well, I know a lot of people are thinking, hey, we may rally into Christmas into the new year, or you know, maybe it dips down and then the rally continues in January. We'll have to wait and see.
Yeah, And I'll say for what it's worth, you know, in twenty seventeen and twenty twenty one, we actually had some rough decembers. I'm not going to say that that's exactly what will be the case this time, but taxes are a thing in most areas of the world, and when we have such crazy good performance years, there has been a bit of a letdown for the last month,
sometimes two months of the year. I know this November was huge, but don't be shocked if there's a little bit of trepidation and whales and sharks kind of go on cruise control a little bit for the next few weeks, where bitcoin might in crypto might actually become a little bit boring for once, and suddenly in January February that's where we might start to see fireworks in either direction
once again. But holidays kind of tend to pull back the amount of volume as we get toward the second half of December, and profit taking for tax purposes can be a thing. So i'd be in the very short term, I'd be aware of that phenomenon and how prior huge years like we saw in seventeen and twenty one had that result and it could happen again.
Great great advice, great insights, Brian. Thank you so much, and we'll have to do this. I think I know the holidays that coming up, but we got a touch base before Christmas to see what this market is doing. Maybe it goes up, maybe it goes down. We'll have to wait and see.
I'd love to man. Yeah, I'm looking forward to catching up in one to two weeks and we look back at just how you know the very end of this year is going to shape the markets. I think it's gonna be kind of chaotic and just strong opinions in both directions. But you know, it's always fun looking at the data with you, and I appreciate the time as always