There is a lot of uncertainty in the markets right now. While Bitcoin and large-cap altcoins have been quiet for a while, the DeFi pumps and small altcoins pumps are reminiscent of the beginning of a bull run of 2017. The traders are apprehensive of another bubble built up. Nevertheless, there are still signals strong signals for bullish accumulation in it.
Bullish On-Chain Indicators
Miners account for a large portion of the sell-off in the market, the recovery in the hashrate is a hugely positive signal for the market. Moreover, according to Ki Young Ju, CEO of analytics firm, Crypto Quant, the outflow is suggesting a limited sell-off as well. He tweeted,
On-chain Indicators Status: BUY
– Miners are not selling (based on MPI, Miner Outflows)
– No significant #BTCexchange inflows from whales so far
– All exchanges’ reserve hit the year-low a month ago and keep that low
DeFi Pump Continues
The DeFi pump is still on as double-digit gains of popular DeFi tokens continues to rage on. The total market capitalization of these tokens is just south of $10 billion. While COMP and MKR tokens are underperforming, 2nd and 3rd tier projects like Aave (LEND), Sytheticx (SNX), Thorchain (RUNE) and so on are compiling gains.
SpartanBlack (alias), a crypto analyst and partner at The Spartan Group tweeted,
As you go out the risk curve and look for the next DeFi star, this is the risk you need to weigh, and it needs to be priced in. Be wary of projects that over-promise and fail to deliver.
GOLD and SPX
The traditional markets are also in accumulation right now. SPX index is currently facing resistance for the break-down point of the COVID-19 crash at $3230. Moreover, gold made a new yearly high at $1820.6.
As for the bearish arguments, the resistance around the $10,000 level is still intact, with no sight of an uptrend in the global economic outlook. Moreover, Bitcoin [BTC] has already gained over 150% from lows after the COVID-19 crash, this reduces the apparent opportunity of inflows further. A break-out of the resistance around $10,500 will be significant for the bulls, while the long accumulation above $9000 is positive as well.