Editor’s Note: This article was first published in our ‘Signals’ newsletter before the current ‘pump’ started a few days ago. Our newsletter subscribers will always be the first to receive Santiment’s custom market insights, before we share it with the general public. Below analysis should not be considered investment advice. No one should make any investment decision without first consulting their own financial advisor and conducting their own research and due diligence.
The recent price ‘movement’ of Bitcoin and Ethereum has been boring to say the least. It’s been so uneventful these past few weeks that we’re already seeing memes pop up about BTC as the next big stablecoin. Although BTC and ETH aren’t growing (and they have enough reasons not to), quite a few tokens/networks on the ethereum blockchain have been blinking on our bull radar recently.
What are these projects?
We have 10 of them in our internal list for now, but the number keeps growing. We’ll cover three of these projects here:
They all show similar, bullish patterns, which is the focus of this article. Starting with:
Pattern #1 – ETH Decoupling
All of the projects on our list exhibit what we’re calling an ETH decoupling pattern (no subject to copyright – our SAN clan shares this term freely :).
What does that mean exactly? See for yourself:
BAT Decoupling, taken from SANbase
MKR Decoupling, taken from SANbase
ZRX Decoupling, taken from SANbase
Historically, the price of these 3 tokens faithfully mirrored ETH – not anymore. Particularly over the last month or so, we’re seeing a number of ERC 20 projects completely break their ETH price interdependence and start dancing to their own beat. And you have to admit – it’s a pretty catchy tune.
Me, minus the dreads, upon seeing these graphs for the first time
Pattern #2: Strong On-Chain Activity
We spotted this pattern by using some unique features of the Santiment platform. To our knowledge, this type of on-chain visualization isn’t available anywhere else. You can check out our dashboards for yourself here.
The tooltip to the right explains what each graph means. Let’s jump in:
BAT on-chain metrics, taken from data.santiment.net
MKR on-chain metrics, taken from data.santiment.net
ZRX on-chain metrics, taken from data.santiment.net
As you can see, the abnormal pricing activity is strongly reflected on chain as well. It’s worth nothing that this on-chain activity isn’t monolithic; each project still has their own quirks.
BAT is displaying a very healthy pattern, steadily growing in both price and speculative activity. ZRX recorded the most explosive spike across all observed metric, with MKR not all too far behind.
Pattern #3: Social Volume
A final note of caution… and this last part is taken from our unique “behaviour analyses” side of the platform with crowd sentiment measurements. The “Social Volume” metric shows number of mentions of a token across various crypto-related social media.
Let’s have a look (this data is also available on SANbase Dashboards).
While action is bullish, we believe you don’t want to buy at extreme values on social volume, as such activity might mark a short-term top. So we have waited until the attention of the traders crowd has declined to more or less normal levels.
In Plain Sight
In short, these three observations lend us some confidence to say that the crypto networks, built on top of the ethereum blockchain, are done waiting for ETH to bounce back: they’re paving their own bull run.
Logically this price movement should eventually find its way to ETH as well. A similar pattern happened in 2016-2017 when ETH launched the explosive bull run and BTC followed. But the market is irrational enough that we prefer to stay in the present moment. And at this moment… the price dynamics of some tokens are now decoupled.
We might still see some decline if the whole market needs to make one more low. However, the risk is now to break to the top in the “healthy” tokens.
TL;DR The bull market has started. It’s not about “when” anymore – it’s about “who”.