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In this version of Uncharted Distilled, we will be addressing Uncharted #10, in which we analyze bitcoin’s sharp recovery following the Ukraine invasion and what it entails for the end of Q1 2022.
Let’s dig in!
Summary
Uncharted #10 starts by analyzing bitcoin’s V-shaped recovery, which led to the start of decoupling from equities. We conclude by analyzing an impulse of new demand mitigating further declines.
Bitcoin moved towards $40k in mid-February, triggered by a significant CME gap. War in Ukraine broke out, rendering the move ineffective to break through the price ceiling around $44k.
Bitcoin showed a massive 17% price recovery on March 1st, decoupling from equities proving to be an asset class of its own with major long-term diversification potential.
SEC filings show institutions building directional exposure by buying grayscale shares at a 30% discount.
Capital that was sitting on the sidelines begins to flow into bitcoin.
Lack of altcoin momentum drives more capital into bitcoin.
Bitcoin’s traded volume breaks through the long-term downward trend driven by the futures market.
Bullish sentiment reignites while investors are willing to take on more risk, and the market incentivizes short liquidity to meet the increasing demand.
The market faces a higher probability of a supply shock due to fewer coins available for the strengthening demand.