A summary of market performance and the factors driving the markets over the last month, reflecting the general crypto market sentiment, on-chain data, DeFi, Bitcoin, and altcoin market.


 

General Overview 

Market cap 

Since the start of the month on September 1st, the cryptocurrency market's valuation has fallen from $374.853B to $298.235B on September 6th. This decrease of 22.44% was made from the yearly high vicinity were the price came to revisit the zone first made on August 17th.

(Click the image for higher resolution)
Source: TradingView


As we have seen a sudden downfall, the price broke down from its horizontal support level at around $335B area, which is currently being retested again for resistance for the second time. The market capitalization chart shows bullish signs from the 24th of September as a minor higher low was made, but now, the confirmation to set in a higher high is needed.

The valuation is currently pointing up but came to the intersection of the still unconfirmed descending triangle and the mentioned horizontal support, which now serves as resistance. This is why a breakout above the area would indicate that we have seen the descending move since the start of the month ended. If the valuation comes short of making a higher high compared to the one made on the 19th of September, this could mean that we have seen a corrective move from the $298B level, after which further impulsiveness to the downside is to develop.

 

Bitcoin dominance 

Bitcoin’s dominance has been increasing following the decline in market valuation and made a 5.18% rise to 62.28% on the 23rd of September. Since then, however, we have seen a sharp decline pulling it back to the levels from which the increase was made at around 59.2% zone.

(Click the image for higher resolution)
Source: TradingView


This decline could indicate that market confidence is returning as investors are getting back into their altcoin positions. If we look back at the market cap, we can see that the rise in valuation has occurred since the 23rd of September.

 

Altcoin capitalization 

The total market capitalization of altcoins has increased further than the global chart, explaining the diminishing valuation in Bitcoin’s dominance. From the 23rd of September low at $114.874B, an increase of 19% occurred measured to the current level on which it is hovering at $136.735B.

(Click the image for higher resolution)
Source: TradingView


As you can see from the chart above, the altcoin capitalization's valuation made a higher high compared to the one around the 14th of September. A breakout was made above the horizontal support level that served as resistance and the unconfirmed descending trendline, a highly bullish sign. Even though unlike in the global chart, we haven't seen a higher low on the 23rd, this breakout has shown strong bullish momentum and indicates the completion of the descending move since the start of the month.

 

On-chain data 

BTC: All Exchanges Netflow

Since the start of September, we have seen more coins outflowing the exchanges then coming into the exchanges. Curiously, on September 1st, when the significant decrease occurred, the netflow was sitting around +164 Bitcoin in difference, while the day before, an outflow of 8372 Bitcoin occurred.

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Source: QryptoQuant


With only 8 days in the month being net positive, the trend of exchange outflow continued leading to its highest peak today with a negative 39.9k. This can be interpreted as a bullish sign as the inflow of BTC to exchanges usually indicates selling pressure while outflowing that the market participants are preparing to hold their Bitcoin. 

 

Bitcoin: All Exchanges Reserve

On the Bitcoin Exchange wallet's chart, you can see a declining trend with today being the lowest Bitcoin has been held on exchanges for a while. From the beginning of the month, the number of Bitcoin held fell from 2.49 million to 2.375 million where it's currently sitting. 

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Source: QryptoQuant


This is the continuation of the downtrend that started at the start of August when Bitcoin's total amount on exchanges was sitting around 2.6 million.


Market Data

Market-Value-To-Realized-Value Ratio (MVRV)

This ratio still shows that the market is in the undervalued zone as it's been hovering in between the 1.6 and 1.38 zone. These are the same levels as from May till late June and indicates that the market still hasn't picked up the steam.

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Source: QryptoQuant


Last month on August 17th, it was sitting just slightly below 1.7, which is the highest it's been from August last year when the price topped out. Even though the ratio in itself is in the undervalued zone, it could indicate a short-term market top that occurred in August. But considering that the exchange netflow indicates accumulation, this can be interpreted as a bullish sign. 

 

Miner Data

Miners’ position index

The index of miners’ position is currently sitting slightly above the 2.25 point mark, which indicates that the majority of the miners are selling. As they are viewed as a supply-side, it could indicate a negative price trend development due to miners selling high activity.

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Source: QryptoQuant


Since the start of the month, we have seen the index oscillating around the 0 point mark, but with the max being -1.04 on the negative side made on the 9th of September, we can say that most of the month has been followed by miners selling pressure. This can be viewed on the price action as we have seen a decline in value from the 1st of September.

Miners pool outflow

That the miners are providing selling pressure, we can validate from the miner's pool outflow chart on which we can see that today the outflow amount is at its highest since the start of the month. It is currently sitting at 3.756 BTC (while writing this) and looks like it might increase as from the 26th, we have seen a rising trend.

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Source: QryptoQuant


Bitcoin

Technical Analysis

The price of Bitcoin has reached $12050 on September 1st. This was an increase after a downfall from its yearly high at around $12470 made on August 17th, till $11245 on August 27th. 

As the price attempted to continue its upward trajectory but failed to surpass its prior high, coming short of around 3.28% and finding resistance again, it was sent into a downward trajectory as the sellers' zone was revisited.

(Click the image for higher resolution)
Source: TradingView


It fell by 18.6% from its September high, coming to $9815 at its lowest point made on September 8th when the final hourly chart spike to the downside was made. As this spike-triggered buying, recovery has been seen since the price is coming back to test the horizontal support level at $11158, which was validated as resistance on the 19th. 

We have seen an impulsive descending move since the start of September, after which a three-wave impulse has been seen that came up and tested the broken horizontal support. As resistance was found at those levels, the price fell back to the 0.382 Fibonacci level and found support for another increase. 

The increase seen from September 23rd could still be a corrective one as the prior decline showed signs of impulsiveness and would, in that case, be a lower degree ABC correction. But since a minor ascending trendline has formed local support, the further increase could be seen as the C wave development. 

Although a lower high was made on the 28th with the price showing signs of struggle to keep up moving to the upside, the current range breakout could be more likely to develop above the significant horizontal resistance. If that occurs, it will indicate that the impulsive decline from the start of September likely came to an end, but if the local ascending trendline gets broken on the downside, it could serve as an early indication that the price is headed for lower lows then on September 8th. 

 

Fundamental Analysis

Hash Rate 

In September, the total hash rate in terahashes has made another all-time high coming to 143.138m on September's 19ts. We can see that this is a continuation of the ascending trend that started all the way from late May, shortly after the halving.

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Source: Blockchain.com


A minor pullback below the 134 area occurred, but the valuation is currently sitting just slightly below its all time high, at around 138.26.

 

Velocity

Looking at the Bitcoin velocity chart, we can see an ascending trend that dates back from the 21st of August when it was sitting at 19.57. Since then, an increase has been made to 22.935 and is still in an upward trajectory.

(Click the image for higher resolution)
Source: QryptoQuant

As the circulation is gaining traction, and we are seeing an increase in the network’s activity, this could be interpreted as a sign of confidence.

 

Altcoins

Out of the top 10 cryptos, the best performing one in September was Binance coin (BNB). Unlike Ethereum or ChainLink that have made their significant-high around September 1, BNB has made a decrease from the $25.35 area to $18.3 but then reached a new high of $33.29 on September 14.

(Click the image for higher resolution)
Source: TradingView

Since then, we have seen the price cooling off but have still shown a better performance than the other two major altcoins, which have created lower lows on the 23rd of September then on the 5th, while BNB made a high one and proceeded to increase above its September 1st high. 

Ripple has been the worst-performing large-cap and made the most significant lower low on the 23rd of September and is currently being traded around the early September lows levels.

(Click the image for higher resolution)
Source: TradingView


DeFi

Even though the market was mostly in decline since the start of September and is struggling to keep afloat above the lows around the 5th of September, the DeFi sector has experienced continuous growth.

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Source: DEFI PULSE

 

As you can see from the chart above, the total value in USD locked in DeFi followed the decline we have seen in the general market but started increasing again on the 6th of September from where it made a new all-time high of 11.137B in USD locked. It has taken a slight downturn and is sitting just around the 11B mark but looking at the momentum behind the move, this is likely to end only as a minor pullback with further growth potential ahead. 

Uniswap DeFi market dominance is sitting at 19.61%, which is an increase of only 0.39% from last month. However, considering the liquidity issue with SushiSwap taking a chunk of its liquidity, this is still a positive sign. 

On the Uniswap DEX, the higher annual yield is for ETH-USDC and is currently 37.85% per annum. SushiSwap’s highest yield is for YAMv2-ETH and is currently 96.88% yearly, next to that is AMPL-ETH with 73.48% while UMA-ETH is at 57.1%. But the highest of all is on the Harvest exchange for Farm profit-sharing which equals to 1,790.87% yearly or 4.91% daily. 

 

 

Conclusion

The market confidence has stood shaken since the start of September, with the price showing signs of weakness. But since the sharp decline from the 5-6th of September ended, we have seen a recovery which was, in some cases, more significant than in others. 

On-chain data suggest high trading activity occurred but that the market participants have started stacking their satoshis and have been accumulating from miners and taking them off the exchanges.

DeFi sectors have decoupled from the general market after the sharp decline in valuation ended and continued its growth trajectory throughout September. With Bitcoin's dominance diminishing and altcoins looking like they are taking the lead in the next market growth cycle, we are likely to see the beginning of another bullish period. 

As Bitcoin's price suggests that the recovery seen from the 5th of September could be corrective, we might see the inflow of capital from Bitcoin into altcoins, which is what the charts suggest. The downfall in Bitcoin's dominance has already started to provide an early indication that this possibility is likely heading into October. Still, we are far from "alt-season," as suggested by the Elliott Wave count.

 


 

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