3 min

Digest #1

Whalemap’s new weekly digests

Welcome to the very first edition of Whalemap’s Weekly digests! In our weekly email updates, we filter out the noise to provide a distillation of the biggest stories in the cryptoverse and peel back the layers to show how these trends and developments are manifesting onchain. The ‘Trade of the Week’ also provides the community with crypto trading insights using our onchain analytics.


Most now know that bitcoin emerged out of the financial crisis as an attempt to limit the excesses of the financial sector through algorithmically controlled sound money. What is less obvious is that, due to this, bitcoin’s price discovery has taken place almost entirely within the dovish, “easy money” macro environment (ZIRP, QE etc.) engineered by policymakers to revive a global economy on life support post the 2008 crash.

But times have changed. Today, supply chain and energy crises, once-in-a-generation inflation, and geopolitical pressures have pushed a global economy still reeling from the pandemic closer to a recession and this has impelled central banks to pursue a much more hawkish policy direction. With bitcoin having pulled back as much as 74% so far in 2022, these shifts have been a perfect storm for risk-off assets and have made each Fed announcements a major event of the crypto news cycle.

What's in the news?

Negative macro picture remains

The news on the economy remained mostly unchanged throughout August, with the latest data showing inflation at 8.5% in July, down from 9.1% in June. Despite this slight cooling off, Fed officials were unequivocal that it is too early to tell whether peak inflation has been reached. Similarly, the BoE announced on August 17 that UK inflation had hit its highest level in 40 years (10.1%), with the central bank hiked the base rate from 0.5% to 1.75% earlier in August – its steepest in almost three decades – as part of efforts to cool inflationary pressures.

It has been interesting to observe the variable impact of Fed hike announcements on bitcoin. Whereas the announcements of 25 and 50 basis point (bps) hikes announced in May and June respectively resulted in sizeable downwards price movements of 8% and 10%, the more recent announcement in July actually saw bitcoin bounce as much as 8% on the daily. This pattern was also observable in equities, where the S&P 500 rose 2% on the news.


There are various reasons for this sudden change in market reaction, however, a key difference was Chairman Powell’s statement that Fed policy would be “fully data dependent'' going forward as the Fed had reached its ‘neutral rate’ (the interest rate that reaches equilibrium with current economic potential). This means that automatic rate increases would no longer be the norm and that peak hawkishness may already be behind us resulting in potentially declining bond yields – which is typically positive for risk assets such as crypto and stocks.

Crypto market shrugs off a deluge of negative news

At the same time, crypto markets remained remarkably stable considering the deluge of negative news since the start of August. From the polkadot-based AUSD stable coin depegging and Curve Finance hack of $190 million, to the $200 million security exploit of bridge protocol Noam, these developments have had very little downside impact on the price of bitcoin and other cryptocurrencies which have continued to provide accumulation opportunities.


Just as one of the characteristics of bull markets is the responsiveness of price to positive news, one of the features of bear markets is often the reaction (or overreaction) to negative news. But here, the indifference of the market to the latest slew of negative news may suggest that sentiment has already hit its lowest point. This is born out by the 'fear and greed index' readings which shows that sentiment has indeed started to climb after bottoming in June.

What does the onchain data say?

Trend reversal?

Onchain data reflects the market apathy that has kept bitcoin rangebound between $22,500 – $25,000 in August and which has to some degree attributable to institutional outflows and periodic whale selling due to the uncertain economic and geopolitical environment described above.

But the latest wave of whale outflows was accompanied by a steeper decline in price to retest support around the 20,850 level on August 19, establishing a stronger upper resistance band of 23,950 and 22,950, as shown on the volume profile chart.


Though the cluster of bubbles definitively shows significant whale selling pressure, the latest sell-off back to $21K also shows up on other onchain metrics. Looking at realised price, which is the average purchase price of market participants, we can see that bitcoin’s move above the realised price line on July 18 meant that it had only spent 35 days trading below it – a much shorter time period than in previous bear cycles.


We predicted that a fundamental trend reversal from there would be unlikely as this would make it one of the shortest bears in history and doubly unlikely given the current macro picture. Specifically, price rejection is happening at the uppermost 100-1,000 BTC band, meaning that more accumulation momentum will be needed to make a sustained move through this cohort.



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Every time you confront something painful, you are at a potentially important juncture in your life—you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion.

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