In the trading world, a fundamental metric (probably the most important) is the trend in the time frame studied. It is a factor that is often forgotten and is reduced to a sentimental issue. When assets fall we make publications about how bad things are going and if there are rises we justify them with arguments to buy.
Talking about a bear or bull market is a reduction that is not always useful or practical. Sometimes, it is better to compare metrics and decide based on multiple factors. The term limbo is particularly interesting in this case because we have not been baptized with the “blow-off top” of the euphoric end-of-cycle euphoria. And there is no consensus on whether or not there is a limbo either.
One of the metrics that could mark the beginning of a multi-year bear market is the drop in the number of active addresses, with lower and lower lows and more importantly, higher highs. At their highs, they also did not reach levels much higher than 2017.
Like so many other onchain metrics it leaves us with a very clear question: How long will this bear market last? At least in the short term we should see a new high in price and directions to rule out the bear market thesis. Let’s continue with the onchain.
The Hash Ribbon, which measures the profitability of miners, remains in positive territory. It is a selling pressure that at the moment is not causing liquidation cascades. Although it is true that if the declines continue their profitability could fall into a selling spiral.
In terms of moving averages we would be in a clear bearish pattern, considering the exponential average scarf on weekly, including a clearly bearish close, after trying to overcome resistance. The last time this happened was in March 2020.
One hope for the bulls is the “Three Hills and the Domed House” pattern.
In March 2020 we also saw a similar pattern, which respected the previous lows. How far this correction will go and how long the declines will last are difficult questions. Therefore, I encourage you to follow our posts to keep up to date with market movements and their impact.