This week’s chart: Bitcoin price continues to move sideways, up and down, continuing the bear market. After all, the bottom and thus perhaps also the trend reversal are in sight. Ethereum, on the other hand, is continuing the downtrend more aggressively while other smart contract platforms are taking a massive hit.
Course events in the last few weeks have not been particularly exciting. Sometimes it goes up a bit, but before you take heart that a trend reversal is happening, the price collapses again and gives up everything you have won. At the same time, however, it does not sink so low that it would be THE buying opportunity.
So the price remains in the somewhat shaky sideways channel with slight upward breakouts that quickly disappear. The bear market continues and those who invested at average prices in 2021 and 2022 are massively down.
Glassnode analysts state that the “Net Unrealized Profit/Loss (NUPL)”, i.e. the unrealized profits or losses, has fluctuated between 18 and 25 percent since the beginning of May. This means “less than 25 percent of the market cap is held at profit.”
This corresponds to “a market structure similar to the phase before capitulation in past bear markets.” When capitulation occurred in these, the NUPL collapsed from around a good 18 percent to a low point around and below 25 percent. Such a “full capitulation” would currently equate to a bottom of $20,560 to $23,600. From the current price of just under $ 30,000, it could go even lower.
The rainbow chart confirms this assessment: Here the price has currently entered the second lowest color spectrum; below $21,000 he will plummet into the deepest. If the past were to repeat itself, entering this layer would be inevitable.
A look at Google Trends also shows a declining attention bubble:
This illustrates a further temporal scaling somewhat more clearly:
Attention has been falling since autumn 2021. As with the price, there seems to be a little downward scope here too. Compared to the last bear market, however, it is striking how consistently high the level of attention remains.
The rest of the crypto world
Aside from these bitcoin remarks, we have some interesting details to share about the broader market.
The price of Bitcoin currently looks cheaper than that of other coins, such as Bitcoin Cash or Ethereum. Where Bitcoin after the crash on Friday, May 13th (of all things!) is moving sideways with mild upward trends, Ethereum price shows a very clear downward trend of falling highs and falling lows.
Looking at Google Trends, we see that Ethereum is losing attention more aggressively than Bitcoin. Even more extreme, attention is slumping for NFTs while DeFi has evidently never made it onto the mainstream radar.
With Ethereum, the fees are falling, much to the delight of users. Etherscan’s chart shows declining miner earnings in Ether; in dollars the losses would be even greater. For users, this means that Ethereum will become usable again.
The consequence of this is that the incentives to switch to other smart contract blockchains are reduced. The “Ethereum killers” suffer even more than Ethereum itself.
The agony of smart contract platforms
In addition to the course, the TVL is a good indicator of this. This means the “Total Value Locked”, i.e. the capital invested in DeFi smart contracts. It is one of the fundamental metrics of DeFi.