We have long wanted to reach this point where we can talk about the market on a positive note, albeit with all the caution in the world. The fact is that we can really appreciate an important change of context in the market, visualized with a stabilization of the ratios and a positive context in general.
It is clear that the situation is not the best, but knowing where we are, we cannot deny that the trend, the inertia of the market is slightly bullish at this moment.
Distribution zone: the first target
It is also true that the movements we have seen so far are mere technical movements when we look at the chart with a certain perspective. To see really significant values of the market we would have to overcome this distribution zone or lateral range, generated after the fall of the market in June.
I do believe that we are now playing with an advantage, and that is that the market has assumed its own weaknesses. It knows that it has feet of clay and that it can fall… but if it does… it can and is capable of getting up again, perhaps even stronger than before.
We can clearly see how Bitcoin is threatening the upper zone of the distribution channel generated by the June drop.
The breakout of this zone would have a huge significance from a technical point of view and could mean a change of scenario.
We can see the same price structure in Ethereum, with a bullish momentum that is the most robust in recent weeks.
The weaknesses of the market
It seems that the market has already assumed that it is not invincible. Nothing goes up forever. This is something that investors seemed to have forgotten after a long period of continuous bullishness.
This return to reality will create a more pronounced awareness of risk control and may itself be the filter for certain practices we have seen so far. Perhaps we should ask ourselves whether it is viable to have so many exchanges or so many DeFI protocols offering the same type of products and competing to offer the maximum return at any price.
Upward trend in market turnover
Another hugely significant piece of data is that we may be seeing a structural change in the cryptoasset market, with an increase in daily capital turnover, as can be seen in the chart, with rising lows. This results in a direct benefit for altcoins that see their volume increasing, and even the volume of locked-up capital or TVL, another interesting metric to follow very closely
Slow but steady improvement
The market shows us data that is slowly recovering. We are still exposed to negative impacts, but I believe that in order to have a strong impact they should be very important news
The decline to reality that I mentioned, I believe that we have more and more investors who are aware that the risk profile of the cryptoasset market is not homogeneous, and although there may be products or proposals of low quality, this does not mean that the market has to be considered with the same measure.
Could it be that the market is beginning to distinguish protocols and proposals based on criteria other than cost-effectiveness?
I believe that this moment has arrived. In fact, if this is confirmed, it could be the seed of an upward trend, especially more solid than the previous one, although also with a more moderate price increase.
Obviously we may see pullbacks, and perhaps this attempt to break the distribution channel will not be successful, but as long-term investors we have to look at the macro and market structure data, and in that sense I think we are on the right track.