In case the spot Bitcoin ETFs didn't Give it away already asset managers such As Black Rock are extremely bullish on Crypto another asset manager that's Bullish is Fidelity which is almost as Big as Black Rock and they recently Published a report where they analyzed BTC and eth's prices and where they Could be headed next so in today's video We're going to tell you what that report Said and what it could mean for the Crypto Market the report we'll be summarizing Today is titled quote q1 2024 signals Report and it was published by Fidelity On the 22nd of April we'll leave a link To the full report for you to check out In the Description now the report is basically Split in half the first half for BTC and The second half for eth before getting Into the meat of the report the authors Add a note that crypto analysis doesn't Only use traditional Market signals but Also onchain analysis they add that Choosing the right signals can be Challenging and that this report aims to Gather the most reliable Indicators so the report Begins by Discussing bitcoin's shortterm Measurements for reference the report Notes short term to be anything up to One year anyways the first metrics Discussed are btc's 50-day simple moving
Average or SMA against its 200 day SMA The authors note that the 50-day SMA has Remained well above the 200 day SMA Maintaining the golden cross that played Out back in October of last year in case You weren't sure a golden cross is when A short-term moving average passes up Through a longer term moving average From Below which typically signals many Green days head the authors note that While the 50-day average was tested Throughout January the price remains Around 15% above it to their credit they Note that this could be a level where we See some significant pullback and this Has already played out because between The day this report was published and The day we're shooting this video BTC Has fallen by over 15% safe to say they Got that one spot on then with that said The authors point out that btc's price Has quote maintained a healthy gap Between itself and both the short-term Support level of $662,500 and $433 43 well with the 62k level now out of The window we'd better be keeping an eye On that 43k support not Financial advice Of course what sticks out though is the Chart which shows a clear pattern in the 50-day SMA as you can see here the last Two rallies look ear cly similar and we Sh a pretty sharp pullback on both Occasions as the saying goes history
Doesn't repeat but it does Rhyme now the Final short-term indicator to look at is Bitcoin's realized price for reference This measures the average cost that Holders paid to obtain their BTC which The author's note is around $228,000 obviously this means there's Plenty of people in profit which signals A high incentive for some profit taking Driving prices down what's strange is That the report lists this as a positive Thing now don't get me wrong everyone Loves a bit of profit but nothing goes Up forever when those profits are being Taken off the table not everyone will be Feeling quite so bullish to be fair Though the authors do make a good point Saying quote retracements may be Shortlived if demand outweighs selling Pressure and I think it's fair to say That demand isn't going away anytime Soon Alas poor yoro I knew him Htio a fellow of Infinite Jest of most Excellent fancy he hath borne me on his Back a thousand Times and yet for all his Vitality he knewthat [Music] Discount on trading fees now your Exchange sign up bonuses of up to $660,000 Wherefore art thy discounts on Hardware Wallets Too if thou Hast only beheld the link in
The description below how thou wouldst Have marveled at these Riches Alas poor Yorck I knew him AR IO okay now the next section of the Report looks at bitcoin's midterm Indicators for reference midterm refers To anything between 1 and 5 years there Are quite a few midterm indicators in The report so for the sake of time we'll Just cover the more influential ones but You're encouraged to check out the whole Report if you want to see all of them The first indicator Fidelity look at is The net unrealized profit loss ratio or Nupal for short the authors state that Quote historically this metric has been An effective assessment of overall Market sentiment as the name suggests This gives an idea of how many people Are sitting on unrealized gains against Portfolios in the red a score below zero Signals that most people are sitting at A loss usually marking a capitulation Zone a score above 0.5 signals that most People are in profit indicating an Imminent pullback the report notes that Btc's q1 position sits between 0.5 and 1 Floating around the belief denial Zone Normally this would be concerning but The authors note that catalysts such as The harving and the spot ETF inflows Could cement bitcoin's position now the
Chart provided shows a few interesting Things first it shows that the Euphoria Phase becomes shorter and shorter with Each cycle you can also draw almost Perfect support and resistance lines as You can see whacking these on suggests We've already hit the top and are about To see a reversal time will tell if that Plays out or not but to be fair this Seems unlikely given those ETF inflows Anywh who the next indicator the report Looks at is the mvrv Z score basically It compares the market value I.E the Current price with the realized value The price of each BTC when it was last Moved around to determine if we're at Fair value or if we're at a market top Or bottom the authors note that the mvrv Z score climbed along with btc's Rally From 44k to 70k they add that they Believe BTC is still in a healthy Position because quote the incentives to Take profit here are not extreme this Can be clearly seen on the chart Provided which suggests we could still Have plenty of room to run however the Authors also caution that a continued Rise throughout Q2 will likely see more Profit taking next is the stock to flow Deflection which measures the ratio Between the current price and the Traditional stock to flow model a ratio Of one or more means Bitcoin is Overvalued anything less is undervalued
The authors comment that the stock to Flow model is becoming less relevant due To btc's decreasing inflation rate Nevertheless BTC has been considered Undervalued since 2022 according to this Model with an expected BTC price of $117,000 not bad at all now next up is The PE multiple named after its creator David PE this indicator Compares minor Profitability to the previous year the Authors note that minor profitability is A whopping 80% higher than last year and That selling will realize them more Profits they highlight the previous Harving on the chart provided pointing Out miners will lose 50% of their Revenue if prices don't go up they add That transaction fees since Q4 are quote Significantly lower however if you Watched our recent Run's video you'll Note that Bitcoin fees actually hit new Highs which you can see clearly here I'm Pretty sure miners weren't complaining On that day and by the way you can find That Run's video in the description Anyway next the report looks at the net Position change for hodlers this metric Reveals that a lot of hodlers started Selling more of their BTC as prices hit New all-time highs the authors state That BTC hitting an all-time high preh Haring is unusual and as such investors Likely believe BTC to be heavily Overvalued and this ties into the final
Indicator which is the percentage of BTC Addresses in profit now this is is Probably the most bearish indicator of This entire report because it shows that Over 99% of all Bitcoin addresses are Currently in profit now that is a lot of Potential sell pressure weirdly the Chart provided shows that the profitable Address count is now in the warning Zone Although there's no mention of that in The report itself come to think of it This could even be a sign of bias on the Part of the authors okay now on on to Bitcoin's long-term indicators for Reference long-term refers to anything Over 5 years the first metric is the Monthly address count the report notes That by the end of Q3 last year the Number of active addresses had surpassed The 1 million Mark for the first time Since June 2021 however there's been a Dramatic fall since then which the Authors's attribute to reduced Excitement around brc2 tokens they also Note that the demand for Block space has Fallen but speculate that quote this Will likely not be the last we hear from The high fee and high transaction Environment and that we could see new Protocols being delayed again this Points to the runes protocol we recently Covered which I'll remind you can be Found below anywh who the next metric Observes the momentum of new addresses
By measuring the 30-day SMA against the 365-day SMA to gauge onchain activity The chart provided shows that current Active users are quite a way under the Yearly average interestingly the authors Note this as negative but depending on Your perspective this could be seen as Bullish AF that's simply because the Lack of new users is why we still have Potentially a lot more room to run and If the current user activity has already Pushed BTC to new highs then well who Knows how high will go when retail does Come flooding back in the next indicator Observes how many addresses hold more Than $1,000 in BTC since the beginning Of 2024 the number of these smaller Addresses has grown by 20% reaching an All-time high in March of almost 10.7 Million addresses this could be seen as A sign that retail is starting to creep Back into the market the following Metric then looks at the balance of BTC On exchanges which has continued to Decrease since its peak in 2020 to the Author's credit they acknowledge that This is due to the collapse of major Exchanges notably FTX they add that this Pushed more people to self- custody Their own assets before casually Plugging some Fidelity Alpha quote some Custodians such as Fidelity digital Assets are working towards allowing Clients to custody their Bitcoin while
Simultaneously trading through an Exchange venue again we always recommend Self- custody above everything else but Still this could be big news if true and Finally the report ends its BTC section With a special mention of the harving The authors briefly explain the harving Highlighting that the new daily Supply Increase of BTC has fallen from 900 BTC To 450 they acknowledge that many investors Dispute the haring's effects on the Market even stating that some analysts Argue that the reduction of new BTC is Too small to matter anymore the caveat Is that because most BTC is being Huddled rather than being traded freely The slightest of changes to btc's supply Will have a significant impact on price Assuming of course that demand stays the Same or increases being as it's quite Clear that demand for BTC is ever Growing it's fair to say that mining Rewards really do make a difference Okay So that wraps up the Bitcoin section of The report let's now take a look at Ethereum the first thing the authors Observe about ethereum is a positive Shift in fundamental metrics post denune They state that the price of eth has Been in an uptrend since it formed a Golden cross in November 2023 a month After BTC and by the way if you want to Learn more about how ethereum changed
Following the denune upgrade check out Our video All About That linked to below The authors then note that the gap Between the 50-day SMA and the 200 day SMA has been widening ever since with The price difference being around $11,000 they add that in previous bull Cycles this difference hasn't been Sustained for more than a couple of Months and that the recent pullback from The 4K Mark could signal a reversal back To the longer term average the next Short-term metric is ethereum's realized Price according to the report eth's Current price sits about 93% above the Average price paid by investors Signaling that a lot of people could Potentially take profits however the Authors also say quote unlike bitcoin Ether's unrealized price has not yet Reached the levels seen in the 2021 bull Market signifying that investors believe There may still be some room to run in The shorter term translation eth hasn't Hit its previous Al time high yet so This is bullish the thing is though it Might not be as straightforward as that That's because of two things firstly BTC Has already managed to hit its all-time High in large part thanks to the ETF Inflows eth on the other hand doesn't Have a spot ETF and there's growing Consensus that it won't be getting one Anytime soon this ties into the second
Reason while eth has been performing Well in dollar value it has been Struggling against its BTC pair since December 2021 therefore we can't really Be at all sure that a new alltime high Is coming soon anywh who the next Section looks at eth's midterm Indicators the first one is the nle that We saw earlier and this one paints a Similar picture the authors acknowledged That eth has been in a prolonged state Of fear but had entered the belief phase By the end of q1 if we draw support and Resistance lines similar to the ones Earlier onto eth's nupal chart you'll See that we're almost at a resistance Level and that eth's support level is Climbing much quicker indicating a much Lower rate of volatility over time the Next indicator is the mvrv Z score for Ethereum which I'll remind you measures The ratio between market cap and Realized cap according to the report e Is currently at fair value the authors Note here that despite ethereum's Impressive r run throughout 2024 eth is Actually leaning towards the undervalued End of the fair value scale however they Also note that the metric inherits the Volatility of the price and that this Could bring eth into the overvalued Range very quickly the next metric looks At the percentage of unique addresses in Profit notably this metric hasn't
Touched the bottom indicator since January 2020 which the authors say quote May be because ether is not necess Necessarily considered a Buy and Hold Asset this is true unless you fall into The ultrasound money Camp any who the Authors observe that the percentage of Addresses in profit sits at 91% which Similar to BTC should be seen as the Most bearish of all indicators however The authors also speculate that Investors are hodling until eth hits a New alltime high and finally for eth's Midterm metrics we have the pi cycle top Indicator now if you've been keeping up With our good friend Ben Cowan you'll Probably have seen this one before the P Cycle top has historically been a good Cycle toop indicator it works by taking The 111 day SMA and comparing it against A 2X multiple of the 350 day SMA you Know because well Maths anyways the report explains that This metric signals that we don't seem To be hitting the cycle top just yet Which suggests that the earlier theory Of a run to new all-time highs could Have some Merit after all so on to eth's Long-term indicators the first thing the Authors observe are monthly address Metrics specifically new and active they Explained that the number of new Addresses grew by 39% in q1 while the Active address count Rose by 25% with a
12% climb in monthly transactions the Authors again attribute this to the Denuna grade with a lot of activity Happening on Bridges and decentralized Exchanges this ties into the next metric Which measures the transaction count on Ethereum layer 2s to determine the Success of Denon the authors state that While layer 1 transactions grew by 12% Transactions on layer 2os have soared by More than 74% since Denon they add that This even exceeds their expectations Outlined in a previous report which Suggested that layer 2 usage would climb While the layer one remained stagnant The chart provided clearly shows that Transactions have seen a significant Increase since Denon was finalized on The 13th of March and this ties into the Next metric which looks at layer 2 Submission fees basically it looks at The amount of fees a layer 2 pays to the Base layer when submitting transaction Batches to be verified this metric again Shows just how successful Denon was Because layer tws are paying Significantly Less in fees despite Processing far more transactions notably The authors explained that layer 2s were Typically paying 500 eth a day to submit Transactions before the upgrade but are Now paying just 100 e an overhead Reduction of 80% the authors note that users are also
Paying 80% Less in fees on average and Looking at the chart shows that these Costs seem to be more stable than they Were previously now the next metric is The number of stakers and validators the Author start by explaining that while The validator number has been rapidly Increasing since the merge in September 2022 we are starting to see this growth Slow down with a total of just under 1 Million validators by q1 the authors Also draw attention to the chart that Highlights the changes to the tighter Cap on the number of validators allowed To join at any given time interestingly The number of active validators dropped Sharply after denon's implementation to Levels akin to Mid 2023 also observed is the number of Validators who have exited the network Resulting in no real change in the total Validate account since January the Authors state that this is bullish from A developer standpoint as it allows them More time to consider proposals to Adjust the eth reward curve to align With the staking ratio And finally the authors look at the net Issuance and burn rate of ethereum since The merge eth supply has decreased over The Long Haul making eth a deflationary Asset as basic economics dictates A Reduced Supply combined with the same or More demand means number go up the
Report notes that q1 contributed Significantly to this burn with a daily Burn rate of 14,000 eth in early March It's also noted that with the reduced Limit in the maximum number of Validators this should in theory make it Easier for more eth to be burned than Issued and with that we've reached the End of Fidelity's report so then what Does all this mean for Bitcoin and Ethereum going forward well there's a Few things we can decipher from this Report the first is that ethereum Appears to have a much more bullish Future than Bitcoin with increased Deflation a string of successful Upgrades and an all-time high firmly in The scope of investors there does seem To be a lot more room to run the main Obstacle though for eth is well BTC While eth has performed well in dollar Terms quite frankly it's been struggling Against BTC for far too long now yes BTC Had the recent ETF approvals but eth has Been lagging for well over a year long Before the ETFs were front and center Also consider consider that ethereum is Becoming ever more dependent on layer 2os to operate who themselves have Started to use layer 3es to remain Scalable not only does this show that Ethereum is less reliable as a base Layer but there also seems to be less Fee Revenue as eth's liquidity is
Fragmented across multiple blockchains This could potentially be offset by eth Demand on the layer 2 level though as Eth is still used as the primary asset For trading and things like However it's layer 3es that could Quickly become a sticking point that's Because each layer three is application Specific which means they don't require Nearly as much eth for gas fees in order To handle defi collateral or even meme Coins and by the way you can learn more About layer 3s in our recent video the Link is of course in the Description not only this but Bitcoin Also has its own layer 2 ecosystem which Is starting to to grow pretty quickly if This rate of growth continues it won't Be long before Bitcoin starts absorbing Users and capital from ethereum's Ecosystem with that said though there's No denying that ethereum is one of the Most robust blockchains out there and Let's not forget that the ethereum Ecosystem accounts for a huge portion of The overall crypto Market as the bull Market continues to gather Pace Ethereum's demand will likely run on Rocket Fuel particularly when we hit Altcoin season combine that Demand with Eth's deflation and you could well be Onto a winner and if you're wondering When altcoin season could finally be Here check out our video on just that
Linked to Below and that's all for today's video Folks so if you learn something new let Us know by Smashing that like button if You want to keep learning then be sure To subscribe to the channel and if you Want to help others learn then take a Second to share this video with them if You're looking to trade BTC or eth then Be sure to check out the coin Bureau Deals page it has trading fee discounts Of up to 60% and sign up bonuses of up To $60,000 on some of the best exchanges As well as discounts on some of the best Hardware wallets for you to store it all On so be sure to take advantage of these Limited time offers before they're gone The link is of course in the description And with all that said thank you all as Always for watching and I'll see you in The next one this is guy over and out [Music]
