{"id":2709,"date":"2024-07-02T09:02:26","date_gmt":"2024-07-02T07:02:26","guid":{"rendered":"https:\/\/www.mereau-finance.com\/letter\/lettre-n38-phase-de-pre-euphorie-les-respirations-du-marche\/"},"modified":"2026-09-10T15:31:49","modified_gmt":"2026-09-10T13:31:49","slug":"letter-no-38-pre-euphoria-phase-the-markets-breaths","status":"publish","type":"letter","link":"https:\/\/www.mereau-finance.com\/en\/letter\/lettre-n38-phase-de-pre-euphorie-les-respirations-du-marche\/","title":{"rendered":"Letter No. 38: Pre-euphoria phase? ; market breaths."},"content":{"rendered":"

Hello everyone,<\/p>\n\n\n\n

The purpose of this letter is to inform you about the current situation of the crypto-asset market as well as recent news in this field. This letter is not investment advice, but merely a sharing of my personal point of view.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\n\n\n\n

News<\/h2>\n\n\n\n
\n\n\n\n

<\/p>\n\n\n\n

Spot Ethereum ETF: Towards an approval as early as July 4th by the US SEC?<\/a> The cryptocurrency market is poised for another major turning point with the SEC's imminent approval of spot Ethereum ETFs. Are we about to witness a democratization of investment in Ethereum by the start of summer?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

The SEC is dropping its investigation into Ethereum (ETH), according to Consensys.<\/a> A \u00abmajor victory\u00bb reported by blockchain company Consensys. The U.S. Securities and Exchange Commission (SEC) has reportedly confirmed it is dropping its investigation into Ethereum (ETH). The status of the second-largest blockchain was indeed weighing in the balance. What are the conclusions to be drawn?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Latin America's largest bank now allows all of its customers to buy cryptocurrencies.<\/a> Latin America's largest financial institution, Ita\u00fa Unibanco, has announced that its clients can now invest in Bitcoin and cryptocurrencies.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Alloy by Tether: The stablecoin giant launches a new range of gold-backed assets<\/a>. With its new range of synthetic stablecoins named Alloy by Tether, Tether intends to create overcollateralized stablecoins backed by gold. How do these new products work?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

One of the largest banks in the world will soon allow its clients to trade Bitcoin and Ether<\/a>. Standard Chartered, one of the world's largest banks, is preparing to launch a spot trading service for Bitcoin and Ether. It appears this initiative responds to the growing demand from institutional clients.<\/p>\n\n\n\n

\n\n\n\n

Fundamental Analysis<\/h2>\n\n\n\n
\n\n\n\n
<\/div>\n\n\n\n
\"\"
Bitcoin's price over the last six years in euros and on a logarithmic scale.
Source : https:\/\/www.coingecko.com\/fr<\/a><\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

At the time of writing, the price of Bitcoin is 61,341 $ (on 06\/28\/24).<\/p>\n\n\n\n

<\/div>\n\n\n\n

The pre-euphoria phase? <\/h3>\n\n\n\n
<\/div>\n\n\n\n

The magnitude of unrealized profits held by long-term holders (LTHs) can serve as an indicator of their incentive to sell or buy tokens (Bitcoin) on the market. This psychological incentive can be visualized through the long-term holder net unrealized profit and loss (LTH-NUPL) metric.<\/p>\n\n\n\n

As you can see below, we are currently at a level of around 0.66, which corresponds to the pre-euphoria phase (in green). Historically, this pre-euphoria level has been followed by phases of full euphoria, the final phase of a bull market cycle.<\/p>\n\n\n\n

The euphoria phases generally lasted longer than the pre-euphoria phases (98 days vs. 182 days and 69 days vs. 89 days). Currently, we are 96 days into the pre-euphoria phase. If this trend continues, we can expect the euphoria phase to last at least as long, which would bring us to a peak in 96 days, or around November 2, 2024 at the earliest.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
Long-Term Holder NUPL.
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

The regular breaths of bull markets<\/h3>\n\n\n\n
<\/div>\n\n\n\n

Glassnode highlighted market dynamics between capital inflows and outflows by comparing the cost bases of different investor cohorts.<\/p>\n\n\n\n

The chart below shows capital inflows in green when the cost basis of 1-week to 1-month holders is higher than that of 1-to-3-month holders. This indicates positive demand dynamics, attracting new capital to the market.<\/p>\n\n\n\n

Conversely, the chart highlights capital outflows when the cost basis of 1-week to 1-month holders falls below that of 1-month to 3-month holders. This structure signals a decline in demand momentum, resulting in a net outflow of capital from the asset.<\/p>\n\n\n\n

During previous bull markets, a negative capital flow structure manifested itself up to five times. This means that it is entirely normal to observe periods of pause or consolidation within a bull market. We also note that this structure has been in place since May and early June, which suggests that we are likely in a phase of breathing room and consolidation toward former highs. This phenomenon is a positive sign for the upcoming trend. Indeed, the longer the consolidation, the more powerful the ensuing bullish euphoria phase could be.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
Negative capital flow by short-term holders.
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n

A late-stage cycle?<\/h3>\n\n\n\n
<\/div>\n\n\n\n

Here is an analysis of Bitcoin token spending by long-term investors. The chart below highlights, by color, the holding periods of Bitcoin tokens. <\/p>\n\n\n\n

For example, the purple color represents tokens that have not moved for more than 10 years. Although some of these tokens are likely lost, we are observing a decline in very long-term holders, indicating the beginning of selling on their part. This likely started with the approval of spot Bitcoin ETFs, a major milestone offering an attractive exit opportunity.<\/p>\n\n\n\n

The cycle is already well underway, but we believe we are currently in a breathing phase. We anticipate that the trough currently observed in the chart below will continue to deepen as the cycle progresses.<\/p>\n\n\n\n

<\/div>\n\n\n\n
\"\"
Token quantity by holding duration
Glassnode<\/figcaption><\/figure>\n\n\n\n
<\/div>\n\n\n\n
\n\n\n\n

Our service<\/strong><\/h2>\n\n\n\n
\n\n\n\n
<\/div>\n\n\n\n

We offer a discretionary portfolio management service specializing in digital assets. We provide comprehensive, end-to-end human support in this space by personalizing your portfolio allocation according to your risk profile and situation.<\/p>\n\n\n\n

With our turnkey management approach, you can take advantage of industry trends without worrying about digital asset selection, in-depth token research, volatility, arbitrage, and more. You simply need to review your monthly reports and invest regularly, adopting a long-term perspective (4 years and more).<\/p>\n\n\n\n

We do not engage in daily algorithmic trading; we focus exclusively on long-term investments in projects we know and understand. Our monthly portfolio rebalancing is accompanied by an in-depth analysis of the assets, with a particular focus on their tokenomics.<\/p>\n\n\n\n

Check out our website: https:\/\/www.mereau-finance.com\/<\/a><\/p>\n\n\n\n

For any questions, observations, or if you would like to learn more about our services, please feel free to contact us by email at tristan.g@crypto-assets-management.com<\/a> or to schedule a brief phone call afterwards this link.<\/a><\/p>\n\n\n\n

\n
<\/div>\n\n\n\n
\n
\n

Discovery Pack<\/strong><\/h2>\n\n\n\n
<\/div>\n\n\n\n

Investment of under \u20ac20,000 <\/strong><\/p>\n\n\n\n

\n\n\n\n