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Willy Woo Profile picture
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17 Jun, 6 tweets, 2 min read
I've updated NVT Signal to correct for upward drift in the metric (due to volumes moving off the blockchain and only L2).

And yes, BTC is OVERSOLD at historic levels.
NVTS was first published in Feb 2018 by @Kalichkin, as a more responsive trading signal based on my NVT Ratio.

woobull.com/nvt-signal-a-n…
Exchange dominance increased over time. This had the effect of making a proportion of the long term investor volume invisible to on-chain analysis, only happening inside exchanges.
To compensate, instead of displaying the raw NVTS value, we can just show how many standard deviations NVTS is above or below its norm.

I've used the 2yr moving average as the norm and standard deviation is calculated using 2 years of historical sampling.
Live chart: charts.woobull.com/bitcoin-nvt-si…
The NVT family of metrics uses economic first principles to value Bitcoin's network.

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More from @woonomic

Willy Woo Profile picture
18 Jun
#marketupdate, IMO from on-chain is sideways then bullish in maybe a week or so.

Some downside risk if stonks tank, a lot of rallying in the DXY (USD strength) which is typical of money moving to safety.
The first thing to look at is to answer "are we in a bear market". Welp, bear markets start when no new buyers enter to support price and that aint happening, we have healthy growth of new users joining the network.

Let this frame all other metrics.
Of primary interest is capital rotation from stablecoins back into the crypto markets (I'll say that's mainly BTC since alt coins are reducing in dominance).

All of that dry powder sitting on the sidelines has started flowing back in.
Read 11 tweets
Willy Woo Profile picture
1 Jun
A thread about NVT, one of the first on-chain signals first published in Feb 2017.

This is a 2021 re-hash of my NVT learnings since then.

"How to use on-chain volume to establish a fundamental valuation for Bitcoin."
Ever seen this chart of BTC's on-chain volume vs its market cap and wondered why they track so closely?

On-chain volume measures the amount of money moving between investors as seen on the blockchain per day. It's highly correlated to market cap.

But why?
Let's lay down a first principles equation for a pure store of value network:

value moving between investors = value of the network * how much the money supply churns

In short form:
I = M * V

where:
I = Value moving between investors
M = Market Cap
V = Monetary Velocity
Read 13 tweets
Willy Woo Profile picture
9 May
This cycle is different; the movement of coins to strong holders is unprecedented.

Chart: purple line tracks coins moving between weak and strong hands (running total over 128 days)

Raw data: @glassnode
A few observations regarding the trend towards strong HODLing...

1) No way are we entering a bear market. That's obvious this week from price action, but not so obvious 2 weeks ago when the sky was falling.
2) Coins moving to corporate treasuries likely making an impact.
Read 6 tweets
Willy Woo Profile picture
20 Apr
This revisit of lower price has created incredibly strong price validation for Bitcoin about $1T cap. 14% of the supply last moved above $1T cap.

This is a key line in the sand imprinted into BTC's price discovery, an area of immense support.
Anyone thinking we are going into a prolong price correction needs to know about the rate of new users coming into the network per day. We're in the middle of a bull market with a hockey stick of new adoption, especially in the last 2 weeks.
Coins continue to move to very strong holders (the Rick Astleys of this world). And moving at all-time-high rates.
Read 4 tweets
Willy Woo Profile picture
19 Apr
Chinese miners went offline 3hrs into the difficulty adjustment.

The difficulty adjusts every 2 weeks to match the natural increase in hash rate from miners. This keeps block times to a steady 10 mins. If you're going to slow the network down, this is the best window to do so.
9.5hrs into the difficulty adjustment, 9000 BTC was deposited into Binance, this provided enough selling pressure to drop the Bitcoin price below $59k support, forcing the $4.9b of liquidations.
It's an interesting timing of events.

We have 11 more days before the next difficulty adjustment corrects for any loss in miner hash rate. Note the hash rate is already returning to the network.

This is an addendum to my price crash post mortem thread:

Read 4 tweets
Willy Woo Profile picture
18 Apr
#marketupdate, breaking it down, post mortem.

We just saw the single largest 1-day drop in mining hash rate since Nov 2017. The hash rate on the network essentially halved, causing mayhem in BTC price as it crashed.
The power outage in Xinjiang (which powers a significant amount of the BTC mining network) was known before the BTC price crash. Here's local news on 15th April.

translate.google.com/translate?sl=a…
16 April.

9000 BTC was sent into Binance, read that as a sell off of those coins.

I'd note that Binance serves volume from Asia more than the West. It's likely this was sent in from a whale with closer knowledge to happenings in China.
Read 10 tweets

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