Continuation of the market: Analyzing the most bizarre double top of 2021 with on-chain data

Dreaming back to 2021, this article will review the two tops of 2021. (Synopsis: On-Chain Data Academy (9): Market Barometer RUPL(I) - Data Introduction Bottom Reading Application ) (Background Supplement: On-Chain Data Academy (10): Market Barometer RUPL(II) - Strongest Top Signal Historical Cycle Top Detailed Analysis ) Key Points: Market Structure at the Time of Double Cap in 2021 Discuss from the three aspects of URPD, STH-RP, Realized Profit Will the double top structure appear again in 2021? Definition at the top? Before we get into today's topic, we need to define "what is the top". In April 2021, the BTC price fell all the way from about 65k, with a maximum drop of about 55%; If you think "this is the top", then it is a reasonable decision to escape the top at that time; If you think "the second top is the top", then you really don't need to escape the top in April. My personal opinion is: April was the top. Because none of the commodity market betas fell by more than 55% after peaking. From the perspective of on-chain data, there have actually been multiple top signals before April 2021; As for what I think of the second top in 2021, I will share my own bias later. 2021 Double Top Data Overlay Realized Profit For ease of observation, I present Realized Profit as a 7-day moving average: At the first top of 2021, Realized Profit showed a clear warning sign: divergence. As shown in the three blue marks in the figure, as the price gets higher, the realized profit gets lower. And at the second top in 2021, there is a huge amount of Realized Profit again, but it is worth noting: the volume is not as small as in 2021. STH-RP (Average Cost for Short-term Holders) STH-RP has always been one of the data I will pay close attention to, and this data is of high value for tracking market conditions: on the one hand, the relationship between price and STH-RP can be used to deduce possible subsequent market sentiment; On the other hand, it can also be combined with technical analysis to find support and resistance. The above figure is the STH-RP chart during the double top period in 2021, we can first observe the "red mark": whether it is the first top or the second top, after the price falls below STH-RP, it is basically the "right signal of the bear market opening". The reason for this is that if the market is very close to the top (the distribution of low-cost chips is nearing the end), the proportion of high-cost chips in the market will increase, and the dominant force will change. Once the price falls below STH-RP (the average cost of short-term holders), due to the high proportion of high-cost chips on the market, they are not as firm as low-cost chips, and the likelihood of loosening, selling, and causing a chain decline will be greatly increased! As for other non-top periods, we can see that STH-RP acts as a strong support and resistance, which is why I attach great importance to "whether the market has the conditions for a top". Chip structure The chip structure is probably the biggest divergence between this cycle and the previous tops. Based on my interpretation of the current data, I think the market already has the conditions for top formation; But the only weirdest point is that "the chip structure is completely different from before". The picture above is the structure of the first top chips in 2021, when the accumulation at the top was relatively small, and a large number of low-cost chips had not yet been distributed, and the chips below 19k were still in a state of obvious accumulation, with a volume of up to 8.6282 million. And the chip structure of the second top in 2021, after comparing with the first top, you can find 2 core differences: Chips below 19k are distributed in large quantities High-priced chips are evenly distributed, which is not as concentrated as the first top at that time Will the double top structure reappear in 2021? Many people ask: "Will this cycle run another double top similar to 2021?" To be honest, no one can predict the price trend, and the transaction itself actually pays more attention to the planning and deduction of the script. If there is a double top structure similar to 2021 in the future, there will inevitably be signs of "phased bottoming" between the two tops (similar to July 2021), and there will inevitably be data at that time. The above is today's sharing, I hope it will help you, thanks for reading. Related stories On-chain data academy (6): A new BTC magic pricing methodology with ARK participation (I) On-chain data academy (7): A new BTC magic pricing methodology with ARK participation (II) On-chain data academy (8): A new BTC magic pricing methodology with ARK participation! (III) "Continuation of Life Market: Anatomy of the Weirdest Double Top in 2021 with On-Chain Data" This article was first published on BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".