| | | | | By Ben Lilly, Senior Crypto Analyst, The Bleeding Edge | | Managing Editor's Note: We're back with more insights from the Brownstone analysts today with an update on the digital asset market from senior crypto analyst Ben Lilly. | | Jeff and Ben are in Washington, D.C., today investigating all the developments, both recent and upcoming, in blockchain technology and digital assets. | | Despite the low market sentiment, exciting things are stirring in the sector. And as you'll learn from Ben today, we're approaching a tipping point toward another break higher in the digital assets industry… and now is the time to keep our eyes trained on what's happening in crypto. | | |
It's been three months since they fled… | | But, in just the last week, the most important buyers in digital assets have come back to the market, scooping up supply. | | Yet most investors are asleep. | | Digital asset market sentiment is the sourest it's been since 2022. | | | | When sentiment sours, investors and traders tend to tune out what's going on day-to-day. Meanwhile, regulatory tailwinds are already strong flowing from Washington, D.C. | | In fact, Jeff and I are in D.C. right now. We are getting updates from lawmakers, regulators, and industry insiders directly. The policy and regulatory developments have been so positive and happening so quickly that it's important to be on the ground to keep up. | | For the subscribers of Permissionless Investor and Neural Net Profits, we'll be sharing the latest developments and how they present investment and trading opportunities in the days ahead. | | But for today, I'd like to focus on something that has been developing behind the scenes, arguably even more important than these regulatory developments. | | It's what the data is telling us, right now, that we should act on. | | | | | | Elon Musk's new AI model is blowing everyone's mind. It has been called "a game-changer in AI innovation"… "The future of AI"… And "a revolutionary leap forward." Tech legend and angel investor Jeff Brown believes this AI is so powerful that it will kill ChatGPT… And make a lot of people rich in the process. Click Here to See The Details Before May 1st. | | | | Eating Up Supply | | Public and permissionless blockchains are truly revolutionary. | | The transaction history of any wallet is available for all to see. This means we can look at the millions of wallets, their balances, and the history of transactions over the network's existence. | | This is called on-chain analysis, and it's become my specialty during my decade working in the cryptocurrency industry. | | One of my favorite ways to look at on-chain data is to break up wallets into two buckets. We have wallets that hold large amounts of Bitcoin – these are your "whales" – and we have wallets with smaller holdings over time. We can call this group "fish." | | We then see when each group is increasing or decreasing their Bitcoin holdings on any given day. It's a simple way to assess what group is accumulating or selling. | | And in doing this, we found something significant. | | For starters, when Bitcoin breached $100,000 in Q4 2024, we saw that whales were selling. Not buying. | | We can see that within the red circle with the red and yellow dots on the chart. These dots show us that whale wallets were selling. It coincides with when Bitcoin topped out. | | | | Bitcoin then turned very soft in the months that followed. Price went ahead and slipped below the $80,000 price mark. | | This caused liquidations that amounted to an estimated amount between $8-10 billion according to ByBit CEO Ben Zhou. | | But here's the thing… | | In the couple weeks that followed, the market changed. | | We began to see dots appear that signaled whales were buying again. We can see that in the red circle in the chart below. | | This is a great sign. It means that whales are starting to accumulate Bitcoin again. And it's not just one or two days, but nearly two weeks of data points. | | It's a reading we haven't seen since the beginning of October 2024 when the price was around $60,000… And just two months before it surpassed $100,000. | | | | It's not only encouraging, but it's also something that tends to dictate market direction. | | | | | | If you are looking for the perfect retirement stock… Your search is over. Best of all? It’s only trading for only $20! Click here for the ticker >>> | | | | The Biggest Predictor of Price | | The Brownstone Research's Perceptron artificial intelligence system finds short-term trading opportunities in cryptocurrencies based on real-time market data and activity. | | At Brownstone Research, we not only talk each day about AI progress and breakthroughs, we leverage the technology to provide best-in-class services. We use it to see things that otherwise we would not be able to see. | | Now, when it comes to the Perceptron, there's a helpful tool we can look at to help us better identify strong predictors of price movements. | | It's called the Shapley Value. | | The study helps us visualize the weight of certain data to accurate predictions at any given time. We can interpret these values to help us better understand what is driving the market according to the Perceptron. | | What's interesting about this analysis is the screenshot below was conducted during the last few days of 2024. | | We blurred out the metric names to veil a lot of the information we don't want to release to the public. But the one metric squared in red has to do with a certain demographic of whale wallets that we track. | | What we should focus on in the chart below is the more magenta and further the right the data points sit, the stronger the metric predicts price changes when the value rises. | | This metric shows a very strong relationship. | | | | Source: Brownstone Research's Perceptron | | What this means is during Q4 of 2024, whale accumulation (and distribution) had a very strong predictor of price movements. | | It's further validation that we want to pay attention to this specific behavior in the market that we're in right now. | | And with the activity picking up again for the first time since Bitcoin fell well below $100,000, we should be taking note. | | We have whale accumulation and positive regulatory momentum happening at the same time. This combination looks to become the catalyst for the next breakout higher for the digital asset industry. | | Now is the time to be paying attention. | | Your Pulse on Crypto, | | Ben Lilly | | | | | | | This current market environment is a blessing in disguise for those who see it for what it actually is... | | | | | | Let's turn to senior analyst Nick Rokke for some insight into what's going on with stocks, tariffs, and the... | | | | | | It's a perfect time to be planning ahead and thinking about training and careers for future robot technicians… | | | | | | | | | | | | | | | To ensure our emails continue reaching your inbox, please add our email address to your address book. This editorial email containing advertisements was sent to southernstylecooking@gmail.com because you subscribed to this service. To stop receiving these emails, click here. Brownstone Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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