Speaker 1: Oh absolutely, I don't think Brian. From the years we've
done this, I've seen an MVRV that bad on a
thirty day.
Speaker 2: I know, I know.
Speaker 3: I think ever since this big drop here in mid
May that just caught so many XRP traders off guard
when they were getting excited about one point fifty and stuff.
This just decimated a lot of people and we saw
just a massive drop off from there.
Speaker 1: Hey, folks, welcome into the Thinking Crypto Podcast. I'm your host,
Tony Edward, and joining me is Brian from the Sentiment
And as you all know, we're going to do a
deep dive into the metrics on chain metrics for bitcoin
and the all coins to get an idea what's happening
in the market and what may come next. Brian, Great
to see you. Good to see you, Tony.
Speaker 3: We've got a FOMC decision that's coming up in a
couple hours, so things are about to go pretty crazy,
I would imagine, no matter what.
Speaker 2: But I'm excited to dig in. Yeah.
Speaker 1: You know, every time there's an FOMC meeting, I've noticed
from years of setting into markets, there's a lot of
volatility swings in both ways and you kind of have
to let the dust settle. But you know, certainly everybody's
curious to see what Kevin Warsh is gonna do. And
there's also a lot of talks about the Clarity Act
and you know, will that pass next week, so lots
to discuss.
Speaker 3: Yeah, Yeah, from what I've seen on the FOMC expectations,
we are seeing anywhere between the mid low to mid
twenty percentile for expectations that an interest rate hike will happen,
at least according to Polymark and Calci. Many of you
watching have your own expectations and you'll find out the
truth by the time this episode gets released. But going
into the market into that decision, it looks like the
predominant assumption is if rates hike for some reason, we're
going to go down. If rates stay the same, we'll
probably have a moderate uptick, where Trey collectively exhale a bit.
Speaker 1: Yeah, I'm looking at the CME fed watch tool. It's
also showing a higher probability that there's no change and
rates remain the same. But then you'll see if we're
going to get a dubbish or a hawkish Warsh almost
at Powell, but you know Warsh exactly the new normal.
We got to get used to that.
Speaker 3: Still, I still think of Powell every time there's an
FOMC meeting, and now we're on our second for warsh here,
So yeah, it should be interesting. And regarding the Clarity Act,
it's funny, just about two weeks ago they said we
are two weeks away from having that decision made. Of
course that hasn't happened yet, but we're continuing to get
little breadcrumbs showing us that they're progressing. So we're still
kind of waiting and seeing on that.
Speaker 1: Yeah, I know there's a hard deadline next week because
the Senate and the House go on August recess, so
they have to get something passed by next week or
it's going to be tough to move it later this
year in an election year. But obviously this is big
for crypto right It could have a significant impact on
what happens with bitcoin and all coins. So maybe on
that no, Brian, we could take a look at the
sentiment around bitcoin.
Speaker 4: How are people feeling right now?
Speaker 2: Sure, let's check it out here.
Speaker 3: So beginning with just a quick price update, you can
see at least over the past week, almost call it,
ninety percent of assets are in the red. You've got
this anomaly over here, beat up forty six percent, but
for the most part, you know, Bitcoin back down in
the sixty four k's. I would imagine that's about to
get shaken up once we find out the interest rate decision.
Speaker 2: Ethereum pretty similar.
Speaker 3: You got Solana and XRP down six percent each collectively.
So when we check out the sentiment for those, I
wouldn't be surprised if they're a little.
Speaker 2: In the negative.
Speaker 3: But what's interesting here, Tony, is look how much the
social volume is up fairly across the board, Bitcoin seeing
a six percent rising discussions overall compared last week, Ethereum
eighteen and a half percent rise, Tether or even plus
sixteen percent, And you can see it kind of across
the board here, just a lot of assets with interest rates,
not that kind of interest rate, but the amount of
discussion related to them spiking a bit heading into this
FOMC decision. And of course, like you said, the Clarity
Act and the increased focus on cryptocurrencies as we get
closer to.
Speaker 4: That regards to the MVRV, what does that look like.
Speaker 3: So for mvrvs, when we look at the average trading
returns for traders that have been active in the past
thirty days, it's pretty much break even right now. Bitcoin
thirty day holders are plus one point one percent, so
not much of a signal in either direction there. However,
long term still down at negative twenty six percent. I
would expect that we continue to see this healthily in
the negative range, which does create a slight bullish signal
if you're in it for the long term. Remember that
if you're looking at the thirty day and you want
a trading strategy, look at it as how am I
going to do over the next thirty days relative to
what the traders have just done over their past thirty days,
And if they're plus one point one not much of
a signal. But if you're planning to hold for a year,
this line here signals that you would be doing so
with much less risk than average. So I continue to
look at this as good news, and as you would expect,
most assets right now are going to be well into
the negative range for three hundred and sixty five day.
If we take a look at ethereum, it's going to
be a little bit lower on the three sixty five day,
way down at negative thirty three percent, So again, very
good signal there the thirty day because there's been a
bit of a rebound over the past month. If we
go back to June thirtieth, until now, ethereum is up
about twenty one percent, So the thirty day traders are
only up plus three and.
Speaker 2: A half percent because there's so much.
Speaker 3: Call it incorrect decision making on the way up, where
people buy at the top, sell at the bottom, so
on and so forth.
Speaker 1: How about XRP on that note, maybe it's a similar situation.
Speaker 3: Yeah, well, XRP. I still remember our talk from last
time about how it was getting extremely low in early July,
and now it's even worse because XRP hasn't done much
to write the ship yet. And the thirty day MVRV
is a whopping negative fifty seven and a half percent,
which is about as low as it gets. You can see,
was actually slightly off my little custom acts this year,
all the way down to negative seventy two percent in
late May and the three sixty five days at negative
forty five percent. So this continues to be a very
very bullish signal. It doesn't mean we're going to turn
around immediately, but if you're looking for a specific asset
where you're buying with objective blood in the street from
other traders, this is the one you'd be wanting to
look at.
Speaker 1: Oh absolutely, I don't think, Brian. From the years we've
done this, I've seen an MVRV that bad on a
thirty day.
Speaker 2: I know, I know.
Speaker 3: I think ever since this big drop here in mid
May that just caught so many XRP traders off guard
when they were getting excited about one point fifty and stuff.
This just decimated a lot of people and we saw
just a massive drop off from there.
Speaker 1: So I wonder, you know, could we get and this
is potentially now not guaranteed, some good news on the Clariac.
Let's say to send it passes it. Some of these
coins start to rip, and because they were all ways
underwater for the most part, you know, that's where the
fomo kicks saying, oh my god, it's pumping again. We
got good news. But I'll see they're not looking at data,
just going by the sentiment and emotions. But you could
position yourself based on this data and other data points,
of course not financial wise, and be on the right
side of that trade.
Speaker 2: Exactly.
Speaker 3: I think the theory is once we do turn toward
a bull cycle, the assets that have got hammered the most,
and MVRV is the best way to see what those
by low assets really are. These are the ones that
will theoretically pump the most, just based on a regression
to the mean happening.
Speaker 4: Oh absolutely, I don't remember. Is there a Solana version
for this.
Speaker 3: No, Salona MVRV. But we do have sentiment if you
want to switch over to that side. Yeah, let's look
at sentiment. We'll go through bitcoin eat XRP Sjuana perfect.
Speaker 2: So bitcoin is about average.
Speaker 3: I was actually affecting a little more, you know, up
and down here, but I think the consensus has kind
of been the same for the past few weeks, where
there's a moderate chance of an interest rate hike, but
not enough to really freak people out with like a
sudden news report that it's very likely or you know,
not likely at all. So people have kind of stayed
steady here, and I would call this just about dead
average on the sentiment. When you talk about all of
the positive commentary and all of the negative commentary toward
bitcoin across rudd it, Telegram, four chan, x et cetera,
we're kind of smack dab in the middle, and I
expect it's gonna either skew way up if interest rates
go unchanged, which is the most likely outcome, or way
down if worsh pulls a little surprise rabbit out of
his hat.
Speaker 2: And he does hike rates.
Speaker 1: Yeah, there is a lot of uncertainty to your point
with regards to what the Fed's going to do, but
also the Clarity Act. There's a lot of back and forth.
People liked saying, hey, we're not we don't agree to
this draft of the bill, and it looks like I'm
gonna get done. Democrats pushing back, banking lobby pushing back.
Speaker 4: So a lot of uncertainty out.
Speaker 2: There, exactly.
Speaker 3: Yeah, I mean there's just so many waiting and seeing
periods right now, even going back to when the war
was at its.
Speaker 2: Peak, you know, media coverage.
Speaker 3: We saw the same thing here in late May where
people got super positive when Trump said that a ceasefire
was imminent and then surprised that didn't quite happen. And
then even these mini tops here, anytime people got a
little too.
Speaker 2: Positive, down we go positive slight downwards.
Speaker 3: This little segment right here where people were just excited
because we got back above sixty six k and then
down we've gone just a couple thousand ever since.
Speaker 4: HM, and how is ethereum looking.
Speaker 3: So Ethereum has been on a decent price run and
we can see that price has reflect or sorry, sentiment
has reflected that pretty well. This spike here on the
twenty seventh, This was Monday. This was the highest sentiment
we've seen in about five weeks, give or take. And
from what I see, there is a little bit of
a warning signal due to the fact that we're skewing
a bit too bullish as a crowd right now.
Speaker 1: Yeah, I know a lot of people have been talking
about Ethan how it's outperforming bitcoin, and to your point
of crowd just starts to get too bullish and then
you know, I'm sure the market has to correct to
reset that sentiment a bit.
Speaker 3: And it's not like they're outperforming thems performing them significantly.
We can look because we have a little metric called
price BTC, and we can see the ratio and this
and I'll just hide the other two things here for
a minute. So this line shows you can see in
the top left of top left of my screen when
I hover the mouse. The ratio is getting pretty close
to point oh three for the first time in a
long time.
Speaker 2: Actually, it did go above briefly a couple of days ago.
Speaker 3: Maybe that's what people saw, a nice little round number
ratio that got them excited. But regardless, it basically the
ratio is back to where it was in late April.
So when people say, oh, it's it's outperforming for the
long run, I call it about a three month high.
But that doesn't mean that we should be too excited,
especially when we look at the ratio over the last year,
where you know, we had it way up at about
point oh four to two, so a long way to
go there. But you know, the Ethereum crowd, for those
still on the on the eighth train and they're staying
away from bitcoin, called this a nice minor.
Speaker 2: Celebration that they're enjoying right now.
Speaker 1: Yeah, I think people are looking for any sign of
hope because we've been in the bear market. That did
they this little uptake? Oh my god, let's get it's
where back right, It's the same sentiment. It's so funny
how it plays out. You see it on crypto Twitter
and other social platforms. Absolutely, how's XRP sentiment looking so.
Speaker 2: As you would expouse.
Speaker 3: Sorry, this is the raw prices compared to Bitcoin, which
looks devastating as you'd expect with the way XRP has
been performing.
Speaker 2: So XRP.
Speaker 3: It's kind of had some violent mood swings yesterday and
even today it's up a little bit. I would assume
this is probably related to some Clarity Act optimism and
interest rate optimism. The XRP community is really just looking
for something to celebrate right now, because there's been a
lot of positive news, even stuff that we've been able
to report throughout twenty twenty six, but it just hasn't
reflected in the price yet. So you know, call right now,
right now a little bit above average in terms of
bullish sentiment. But I I don't see any significant pattern here, Tony.
It's just kind of zig zagging up and down. As
you know, Bulls try to buy what they think is
the final dip, and bears continue to lol at all
of the blood that continues to pour in on XRP traders.
Speaker 1: And let's take a look at Solana, but also if
we can after Solana Cardono, because there's been a lot
of news around Cardono being a dead project, Charles Hostinson
getting criticized a bit, So I want to take a
look at that one after Solana.
Speaker 3: Yeah, and Cardona actually did have a very good day yesterday,
one of the few green assets going up a modest
six percent while most were down.
Speaker 2: So for sure we'll look at that one.
Speaker 3: Solana a little bit of a bullish bias at the moment.
It looks like, Yeah, it looks like the ratio is
up at around four to one in terms of bullish
versus bearish commentary. And I I'm not positive on what
the catalyst would be here for Solana, but it does
look as though there has been a pretty clear.
Speaker 2: Up trend in sentiment.
Speaker 3: I can even we'll make these like weak candles instead
of daily and that'll show that this week is by
far the highest sentiment we've seen of the year. It
looks like make sure of that fact. Yeah, the last
time we go when this high was mid December, and
as we've talked about, it's not ideal when you see
these big bullish sentiment spikes. This was the biggest year
in mid September and that was legitimately the optimal time
to sell.
Speaker 2: Yeah.
Speaker 4: Wow, hmm.
Speaker 1: I wonder what's causing that, especially the price action doesn't
reflect it at all, So I know's some.
Speaker 3: News and they are a bit more known for having
some heavy bought activity. I would assume it's not Solana's
project itself, but many people have bots that kind of
spew out bullish Solana sentiment for days at a time
and then they go away for a while, so it
can be a little chaotic and misleading with Solana. So
I always take this sentiment and with a bit of
a grain of salt.
Speaker 4: Yeah, I'm about Cardono.
Speaker 3: So Cardano with its outperformance, you would expect a little
bit of an uptick, but.
Speaker 2: We're not really seeing that right now. It's staying. Yeah.
Speaker 3: The ratio over the last week is at about one
point seven to one, which is really not that special
at all. We go daily, let's zoom in here, just
the past three months. Yeah, really not a lot of
bullish sentiment in spite of this mild mild rebound while other.
Speaker 2: Assets were not rebounding.
Speaker 3: So this didn't really turn that many heads right now,
And I would say the waters look pretty safe for Gardano.
If you're trying to counter trade the crowd.
Speaker 1: Sentiment, I think one thing we didn't get to look
at was the bitcoin whale data.
Speaker 4: I'm curious what they've been over to.
Speaker 3: Yeah, so we've had some encouraging movement back in the
right direction for key stakeholders. We actually reported on this
a couple of days ago, and it's kind of come
back down just slightly. But I'd call this a mild
win for bitcoin's future.
Speaker 2: Right now.
Speaker 3: We've seen an accumulation just since call it the past
ten days, of about eighteen point five k etc. Back
into the key stakeholders wallets that hold ten to ten kbtc.
The issue that I see is that retailers just continue
to buy any dips that they can find, and their
optimism appears quite high based on them put their money
where their mouth is. I know we see mixed signals
with sentiment, but when you look at the really small wallets,
they're continuing to.
Speaker 2: Add more and more.
Speaker 3: Albeit they don't own a lot of bitcoin overall, since
they're the smallest here in bitcoin. But this does still
give a nice reflection of what kind of the quote
unquote dumb money is doing, and doesn't mean they're all
dumb traders. Of course, plenty of smart people own very
very tiny wallets. But the reason we look at the
red as a counter signal is it very often will
lead to bad news for bitcoin if they continue to accumulate,
and good news if they start to dump. Even like
we saw right here in the beginning of May when
we finally got that local top and we were up
above eighty k and things were looking really good. That
happened to be when retail was actually selling for a
short amount of time.
Speaker 1: So, h I wonder how it's going to play out,
you know, is there one more flush down that just
wrecks a lot of people and they get very scared. Right,
maybe I'm moved down to fifty k. They thought, maybe
the bottom is in at sixty k. You never know,
you know, that's certain instant aara that could play out, But.
Speaker 2: We'll have to wait and see.
Speaker 3: Yeah, And I wanted to point out the trending stories
that we have right now because, as you would expect,
the FOMC decision is number one. I have seen the
Clarity Act up and down on this list today. It
appears to be off because I'm assuming a lot of
those same people are just looking at the FOMC decision,
which is right in our crosshairs now. But yeah, based
on our collection of discussions that gets put into our
AI system and then posted on the dashboard, it says
the social chatter centers on today's fom CEED decision Kevin
Worsh's press conference as the key market catalyst, consensus expects
a rate hold roughly sixty to eighty percent, but many
traders price twenty to thirty five percent chance of a
twenty five BP hike, so elevated uncertainty.
Speaker 2: You get the idea. So, you know, the.
Speaker 3: Bullish argument is there's a dubbish tone or hint at cuts,
sparking quick crypto and equity rallies, and there is this
surprise twenty five BP hike or pockage tone. So we
can be fairly sure that rates are going to stay
the same, but until that becomes a one hundred percent certainty,
especially with the way this year has gone, with you know,
making assumptions about how the state of the world is
going to be, you really don't know until you get
that stamp of certainty.
Speaker 1: M Yeah, well, I guess well, Brian, we are recording
this before the FLMC meeting on Wednesday, July twenty ninth,
So this is going to air tomorrow, so we'll see
what the results are. But certainly, you know, you're looking
at everything.
Speaker 2: We are in a bear market.
Speaker 1: I don't think we can confirm that the bottom is
in or we've turned a corner, so we still have
to be cautious out there. But you know, one thing
I really like is the looking at that MVR E
heart because it could really gives a signal ass to
you know, a position you can take if again, you
still have to have that long term view, but it
could work out really well, you know, based on how
things are looking.
Speaker 2: Yeah, totally.
Speaker 3: And and Bitcoin, you know, as long as this blue
line stays nice and low in the negatives because average
long term traders are well in the red, that's your
signal that you'd be buying in right now with a
very limited floor, if that makes sense. Yeah, the ceiling
is still a bit iffy because of these hold ups
with the Clarity Act, and you know, even the ongoing
Middle East conflict, which is still not a certain uh
still doesn't have a certain end in sight, even though
there's less media coverage now, there's just a few things
that are keeping us from seeing that that big bullish
breakout that I know so many people are awaiting, and
of course we're also for people on the four year
cycle theory, which I think does have legitimacy. You know,
many people are just awaiting twenty twenty seven, which is
supposed to be the when things really heat up for
bitcoin and crypto based on just the having cycles and
stuff like that.
Speaker 1: Yeah, you know, back in October of twenty twenty five,
it looked like, let's say, the four year cycle, what's
going to break just because of ETFs and all these
different things that happened. But it played out to a
t and I think, if I'm not mistaken, if you're
counting days, that bitcoin technically should bottom come the fall.
And that doesn't mean we're going to rebound right away.
But to your point, twenty twenty seven is going to
be a better year, possibly a up year.
Speaker 2: That makes sense. Yeah, that's how a lot of us
see it.
Speaker 3: For sure, and we've talked about it before. It's such
a small sample size looking at these four year cycles
for a sector that's really only existed for about eighteen years,
so there's what four and a half there's been four
and a half total cycles, if you want to count
it that way, things can eventually break, but you know,
if the crowd starts to think it's breaking, that that
almost creates a self fulfilling prophecy and makes that cycle
click back into gear more likely.
Speaker 2: In a weird way.
Speaker 3: Yeah, you can see all the highs and lows. I
just went back eight years here, and you know, twenty
eighteen is the same crosshair or whatever, the same year
as what twenty twenty six is relative to the four
year cycle. And that was exactly where we bottomed out,
as you said, kind of in that toward the end
of that year, you saw the MVRV way down at
negative fifty three percent. Let me make it just a
little larger for everyone. So yeah, negative fifty three percent
way back in December of twenty eighteen, and that was
your ideal by time, and we went on that enormous rally.
Then people got super excited at thirteen K, which looked
like just a huge number at the time, and then
eventually we fall and COVID and Black Thursday happens and
all this stuff, and that ends up being the ideal
by time.
Speaker 2: Again.
Speaker 3: You can see how these blue lines though whenever they're
negative one, two, three, And this is really the fourth
largest blue cycle negative blue cycle we've had in the
last eight years. Every single time this has happened, if
you can withstand it for a few weeks or a
few months, you typically get rewarded. And of course it's
not investment advice. Anything can happen, but playing the odds
and probabilities, which is really what you know, these kind
of metrics are best used for you can be pretty
handsomely rewarded at the end of the day.
Speaker 1: Yeah, this is such a great view zoomed out because
you see it all the cycle peaks, all the cycle bottoms.
See when the long term traders are underwater, and right
now they are death most definitely underwater.
Speaker 4: And it could be there's a little.
Speaker 1: Bit more to go, or it could be maybe in
the next month or so, there's a reversal. But you know,
for just going based on the data and the historical movements,
it looks like there's maybe a little bit more to go.
And but to your point, in one of those what
you may call generational opportunities, right to just load up
and then just sit back and you know, give it
a couple of years and then you'll it flips to
the upside. Yeah, Well, said, well, Brian, I don't know
if we're gonna meet in a couple of weeks, but
you know, we'll we'll figure it out. But hopefully to
your point, some sort of bottom is in and we
started we start to slowly steadily climb out of this hole.
Speaker 2: Yeah, fingers crossed.
Speaker 3: I think step one is make sure interest rates don't
get hiked. If they do, you know, there's still some paths,
but I think I think here at Sanceman, we're pretty
hopeful that you know, going into Q three at least
we start to see some some pretty nice news. If
not earlier, oh, absolutely, especially in an election year. And
not to get into politics, but I would think that
President Trump would want to go into the midterms with
the markets looking good, you know, at least at the upcurn. Yeah,
US politics, whether we like it or not, it does
matter a lot when it comes to crypto and will
continue to do so.
Speaker 1: Absolutely, But Brian, thank you so much, and catching the
next one.
Speaker 2: Thanks my friend,