When coins on spot exchanges drop, it's a sign that new buyers are coming in to scoop coins off the markets and moving them into cold storage HODL, we are seeing new HODLers right now. Very macro bullish.
It's even more exaggerated with global exchanges.
First scoop up of coins coincided with WSJ press coverage of Bitcoin as a legitimate investment vehicle off the back of the Winklevoss ETF news. It fueled the 2017 bull market.

The latest coincides with @michael_saylor's timeline of research into buying Bitcoin for $MSTR.
Data by @glassnode
No it's not DeFi. This is Bitcoin. Wrapped BTC for DeFi only have volume starting in late June 2020.

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More from @woonomic

5 Oct
1) Spot price: $10k. Futures price: $10k. Resistance is $10k.

2) Traders squeeze futures past resistance, shorts liquidate; cascade of buying. Futures jumps to $10.5k.

3) Market neutral arb: I buy $10k spot & short $10.5k futures until they balance. Spot markets get bought up.
It's important to understand that what goes up, must come down (vice versa), as there's no net capital flowing in from this zero sum game.

Only spot investors injecting new capital can impact the organic valuation of BTC.

Derivative traders only add short term price whipsaws.
Squeezes define most aspects of BTC's price chart as we are in the era of derivatives volume dominance.

You can see these barts on every time frame. I've marked in yellow the stop-loss levels, look at the volume bars showing the cascade of buys as shorts get liquidated.
Read 4 tweets
30 Sep

We're seeing a spike in activity by new participants coming into BTC not yet reflected in price, it doesn't happen often. This is what traders call a divergence, in this case it's obviously bullish.

Chart by @glassnode
We're seeing another impulse of coins changing hands completing.

My interpretation is that the last pulse was take profit, halting the downward move; this impulse should be the one that drives us upwards.
The other interpretation is it's an impulse to push us downwards, but that seems unlikely given OBV (an indicator looking at volume movements) is showing quiet accumulation is taking place.
Read 6 tweets
28 Sep
My 3rd and last tweet on BTC's de-coupling from traditional markets via it's own adoption s-curve of HODLers.
We're at the early adopter phase in Western countries, some higher inflation countries are now broaching early majority according to this chart from Statista.

(And yes, the high monetary inflation the world is undergoing right now is growth steroids for BTC HODLer adoption.)
There's more active onboarding happening now than at the mania phase of the 2017 bubble. You can look on-chain, you can talk to wallet providers, you can talk to exchanges.

Read 10 tweets
23 Sep

This latest pull back did not come with the usual movement of coins on-chain, the sell-off therefore was fueled from coins on exchanges. Without large volumes of coins moving from wallets I cannot see sufficient sell-side supply to push prices down with much gusto.
It was wise to move to USD over the weekend just on the view that stocks looked very week in its technical setup, which did play out and did pull BTC downwards, but certainly the large swing trades happening with coin movements from wallets is still in bullish mode.
While I've heard talk of bearishness down to even 7k, I don't see fundamentals supporting this as a likely event.

On spot markets (Binance listed below), we have plenty of bids below this level and a liquidity gap above through to 10.8k-11k.
Read 4 tweets
18 Sep
Some takeaways from @APompliano's interview with @michael_saylor, CEO of MicroStrategy, after their 38,250 BTC buy ($425m).

Plot goes: "I'm a good thinker and a large financial player, this what I found researching Bitcoin coming from outside of the industry"

Read on...

Michael trained as a rocket scientist, MicroStrategy sells business intelligence software for large clients.

A very engaging interview. He reminded me of this character (The Big Short).
They had a $0.5b of spare cash on the books with no need to deploy it in the foreseeable future.

Meanwhile the assets you really want (real estate, ivy league education, etc) were inflating against their USD stockpile at a real rate of 7% per annum.
Read 12 tweets
16 Sep
Simple 128 Day MA back test since 2012.

1 BTC turns into 10.5 BTC.

Assumes spot selling to USD when crossing below MA and 0.2% fees.

I'm just answering the Q, not recommending HODLers trade.

You would have had to stomach a loss of up to 38% of your BTC at times doing this.
Correction. This is a 1x margin long-only strategy.
This is the correct model. Sell spot to USD when 128 DMA crosses under.

The original chart was a 1x margin long on BTC when crossing over. Few could have done that as margin trading was unavailable in the early days (unless you did it via a cash loan by traditional means).
Read 4 tweets

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