What is a Crypto Winter?

Crypto winter is a common expression that refers to a poorly performing cryptocurrency market. The term is comparable to a bear market in the stock market. A crypto winter signifies negative sentiment and lower average asset values among a large swath of digital currencies. Research shows that crypto winters have a major impact on investor mentality. for more information click here.

Introduction:

In this dashboard, we will examine the performance of three prominent cryptocurrencies: ETH, SOL, and BTC. We will analyze these coins using three key indicators: on-balance value (OBV), moving average versus the asset price, and moving average convergence divergence (MACD). These coins have been selected as they are widely considered to be influential and valuable in the crypto market. By examining their trends, we can gain insight into the broader market. In the second section, we will focus on several blockchain networks, including Ethereum, Solana, Optimism, NEAR, and Osmosis. We will analyze weekly transactions, active users, new users, and transaction fees to determine if activity is increasing or remaining stagnant. By combining this data with the metrics from the first section, we can make an informed prediction about whether the market is entering a crypto spring or remaining in a crypto winter.

Methodology:

In this dashboard I am going to looking at these metrics over different time periods but for the most part I am going to keep it within the year in order to get a glimpse at the start of the crash as well as the progression over time so we can see what trends have occurred earlier in the year and how they are the same or different from what is occurring now. I will be discussing such trends and highlighting anything I find interesting or important to the reader. Finally I will end off with a conclusion where I state where I believe the crypto market is heading into the future.

Ethereum:

Ethereum Analysis:

If we first draw our attention to the metric at the top of this section we can see that since around November 20th the OBV has been increasing, and seems to be increasing faster the more time goes on. This shows that more buyers are willing to buy ETH at its current price highlighting that buying pressure is on the rise for ETH and thus entering into the bull market might be just around the corner, but lets not jump the gun yet lets explore these other two metrics as well. If we move onto the metric on the bottom left we can see that recently the 50 day moving average line was passed by the WETH price line which means that ETH is trending upwards, although we have seen this a few other times throughout the crypto winter it seems that ETH may have bottomed as it has hit its lowest point over the past couple months around late November but hasn’t gone back to that territory since. Moving onto the final in this section we can see that the MACD histogram has had its handful of ups and downs over the last couple months and weeks but the closer to the current date we get that less volatility we see, also there seems to be more positive days than negative days as we get closer to the current date which can’t be said about earlier in the year. Overall it seems that the price of ETH is likely on the rise at least in the short term, although we do not know what the long term may hold it seems that across these metrics ETH has a good chance to continue upward into the future and break out of this crypto winter.

Solana:

Solana Analysis:

Looking at the first metric in this section at the top of the page we can see that the on balance volume has been all over the place over the last couple weeks, with several days trending upwards followed by a few trending downwards because of this it is quite hard to tell if buying or selling pressure is on the rise. Although the price of Sol recently saw a large increase which is likely why we see an increasing trend followed by a decreasing trend likely correcting for an over inflated price. I believe more time has to be played out in order to see how Sol will develop into the future as it is still recovering from the FTX scandal. Moving onto the graph on the bottom left we can see that similar to the ETH graph seen in the first section the price line of Sol has just passed the 50 day moving average for the first time in a little while highlighting a bullish upward trend may be on the rise, although we have seen this happen before followed by a massive crash it is likely that Sol has bottomed in price after suffering massive loss in value from FTX. Also due to google recently buying a large some of Sol and working with them it seems like the coin awaits positive outcomes into the future. Looking at the final metric in this section we can see that the MACD histogram is somewhat all over the place and doesn't have a super identifiable pattern at the moment. Overall although Sol price might be on the rise it does not seem convincing enough from these metrics that we are leaving the crypto winter as it appears there is still a long way to go before we see consistent bullish uptrends.

Bitcoin:

Bitcoin Analysis:

Lets first take a look at the metric at the top of this page where we can see from around November 25th BTC’s OBV has been increasing highlighting that the buy pressure is on the rise as time goes on. Moving onto the graph in the bottom left corner we can see once again that the price line has just passed the 50 day moving average line, which means it is likely going to trend upwards at least in the short run. Although we have seen this before followed by even farther drops in price so this may not be the end. Moving onto the final metric in this section we can see that the MACD histogram is showing much less volatility than it was earlier in the year, also the histogram is showing much more positive values recently than it had been earlier in the year thus the price of BTC may turning around. Overall it seems that at least in the short run the price of BTC is going to be trending upwards although it is not convincing enough evidence for me to believe that we are on the other side of the crypto winter. Regardless this seems like good progress in the direction of a crypto spring although more time needs to be passed before that can be completely determined.

Section 2:

Section 1:

Definitions:

On-Balance Volume: Measures the crypto buying and selling pressure. An increasing OBV means more buyers are willing to purchase the asset at the trading price, and it’s a good indicator of price momentum picking up. A decreasing OBV means selling pressure is high, and it is often seen near the all-time highs, giving traders the chance to sell to make profits. This usually marks a bearish sentiment getting started in the market.

Moving Average vs Price: If the current price of an asset is above the moving average, it suggests that the asset is in an uptrend and that the average price over the last days is below the current price, which is considered bullish. Conversely, when the day moving average is above the current price, it suggests that the asset is in a downtrend and that the average price over the last days is above the current price, which is considered bearish.

Moving Average Convergence Divergence: Positive MACD values: When the MACD line is positive, it indicates that the 12-day Exponential Moving Average (EMA) is above the 26-day EMA. This is considered bullish and suggests that the assets price is likely to rise. A positive MACD line also suggests that the short-term average (12-day EMA) is trending higher than the long-term average (26-day EMA), which confirms the uptrend. Negative MACD values: When the MACD line is negative, it indicates that the 12-day EMA is below the 26-day EMA. This is considered bearish and suggests that the assets price is likely to fall. A negative MACD line also suggests that the short-term average is trending lower than the long-term average, which confirms the downtrend.

Source:

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Analysis:

First if we take a look at weekly total transactions we can see that they have been on the rise as of late although not at a significant enough level to indicate a real turn around, in fact they been at and above these levels a few times throughout this crypto winter. Moving onto weekly active users we can see that they have actually been on somewhat of a downward trend since early December highlighting that activity is down on these chains. When comparing the amount of active users currently to when the crypto market began to crash in May of 2022, when Terra crashed, the amount of activity overall is still done significantly even though NEAR and Optimism activity is up. Looking at the new users over time we can see that as of the start of the new year the amount of new users joining has been on the rise hopefully we can see this continue into the future, although at current levels it doesn’t indicate much. Finally looking at weekly fees collected by chain we can see that besides Optimism fees have also been down across all of these chains highlighting once again that we are likely still within this crypto winter. Overall it appears that as of late activity has been somewhat low on these platforms which means we will likely be in this crypto winter a little longer before we see some real turn around.

Conclusion:

After looking at these two sections it appears that although the price of SOL, BTC, and ETH may be on the rise at least for the short run, the indicators do not show enough evidence for me to say we are heading out of the crypto winter. If trends continue this way it is possible we see the trend flip the other way but at the current state it seems like it may be awhile before we see a bullish market present. Additionally when looking at activity across chains we can see that overall it appears that activity it somewhat the same or even down as compared to the last several months which once again highlights that leaving this crypto winter may take longer than we anticipated. Overall although I do think we are going to be in this crypto winter for some more time I am optimistic about the future, as many of these coins have just started to come back in value after seeing all time lows so if we continue to see trends in that direction it is possible a crypto spring is around the corner.