1/5 The Market-Value-to-Realized-Value (MVRV) Bands are a new valuation model that iterates upon one of the most popular on-chain metrics in #Bitcoin

Learn how it works by checking out the short 🧵 below or reading the full article at @BitcoinMagazine : bitcoinmagazine.com/markets/market…
2/5 The first concept to grasp is that of Realized Value (RV), introduced by @nic__carter & @khannib in 2018

RV is the total value of all circulating coins at the last time they moved on-chain, therefore representing the estimated cost-base of all existing #bitcoin
3/5 Briefly after, @kenoshaking & @MustStopMurad divided the total #bitcoin Market Value (MV) by the RV, creating a groundbreaking metric called the MVRV Ratio

A pseudonym called Awe and Wonder then iterated upon it by standardizing it ((MV-RV)/MVsd), creating the MVRV Z-Score
4/5 Using the same method used to create the #Bitcoin Price Temperature (BPT) Bands before, the MVRV Z-Score can be mapped upon the #bitcoin price chart by calculating the RV+x*MVsd at every point in time, where x represents the z-score that you want to visualize
5/5 To summarize; the MVRV Bands represent the #bitcoin price at a certain number of standard deviations from its estimated cost basis

Due to the use of a standard deviation, the bands curl up during 🐂 runs, adopting more lenient price estimations during more volatile times

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More from @dilutionproof

2 Aug
1/17 Cycling On-Chain #3: Squeezed Supply, Shorts and Bitcoin Lemonade 🍋

Read all about #bitcoin lemonade that is based on squeezing supply, shorts & weak hands in this summary 🧵

...or in more detail in the original article on @BitcoinMagazine itself: bitcoinmagazine.com/markets/bitcoi…
2/17 Last year, @Glassnode learned that when an Unspent Transaction Output (UTXO) is >155 days old, its has a relatively low probability of being spent

Based on this, they created Short-Term Holder (STH) and Long-Term Holder (LTH) supply metrics
3/17 If you divide @glassnode's LTH supply by the circulating #bitcoin supply, you get a LTH Supply Ratio that quantifies the portion of the supply that is estimated to belong to LTHs

LTHs tend to sell against market strength (🟥) and accumulate during market weakness (🟩)
Read 17 tweets
1 Jul
1/22 This 2nd edition of @BitcoinMagazine Cycling On-Chain, "#Bitcoin Enters Geopolitics", focuses on:

1) The impact of China's crackdown 🇨🇳

2) Metrics for El Salvador's adoption 🇸🇻

This 🧵 summarizes it; but read the article for in-depth explanations:

2/22 Since mid-April, China came down hard on #Bitcoin, banning its institutions to offer #bitcoin services, censoring related search results and shutting down mining operations in recent weeks

Hash rate dropped ~50%, to levels not seen since briefly after last year's halving 🤕
3/22 A result of the hash rate drop is that #Bitcoin blocks are coming in much slower than the usual 10 minute block intervals

In fact; block creation slowed down to more than twice the intended interval & levels not seen in >11 years, illustrating the magnitude of this drop 🤯
Read 22 tweets
1 Jun
1/25 @BitcoinMagazine just posted the first edition of a new monthly series titled 'Cycling On-Chain', in which on-chain and price-related data are used to estimate where in #Bitcoin's market cycle we are

I'll summarize the article in this 🧵

2/25 Just like the periods after the 2012 and 2016 halvings, the 2020 #Bitcoin halving created a supply shock that triggered an exponential price increase

However, compared to the previous one, this cycle got heated much faster 🥵
3/25 When the #bitcoin price ran towards and beyond its previous (2017) all-time high at $20k, market participants increasingly started to secure profits

After the January local top, this profit-taking has been decreasing - despite price still grinding up until recently
Read 25 tweets
21 May
1/7 Just published an article at @BitcoinMagazine that uses on-chain data visualizations to explain how #Bitcoin's difficulty adjustment mechanism works & how it relates to hash rate, block intervals, fees & the mempool

This 🧵 summarizes the article 👇

2/7 #Bitcoin reaches its 21 million hard cap by starting with a 50 BTC block subsidy and halving that each 210k blocks, until the block subsidy falls away after 33 halvings

#Bitcoin needs block intervals of ~10 min to ensure these halvings are spread out over ~4 years. But why?
3/7 If #Bitcoin had a fixed difficulty, it would have had an adoption threshold if it started high, or quickly run through its supply issuance schedule if it started low

Relatively stable block interval times are needed to spread out miner incentives & ensure stable throughput
Read 7 tweets
19 May
1/9 Today #Bitcoin saw its first $10k daily candle

The problem: it was to the downside 📉😅

A 🧵 using some on-chain data to have a look at what happened, assess the damage & a possible outlook 🤕
2/9 Today's on-chain movements were similar to those of last week:

1) Most of the coins moving were relatively young 👶

2) Short-term holders are now at net unrealized loss levels not seen since the March 2020 market crash 😱

3) ..and appear to be capitulating those losses 🪦 ImageImageImage
3/9 The young coins that were likely capitulating were a possible sign of inexperienced market participants (e.g. retail) capitulating

Today we also saw a huge uptick in #Bitcoin dominance: altcoins were bleeding (much) harder

Another possible sign of retail capitulation..? 👀 Image
Read 9 tweets
13 May
1/9 About 9 hours ago, Elon Musk tweeted that Tesla would stop accepting #Bitcoin for payments out of environmental concerns, crashing price by -$8.7k (-16%) to just below $46k

Something smells fishy here though.. 🐟

A 🧵 with some on-chain data ⛓️

2/9 First, there's the inconsistency:
- On April 22nd, Elon agreed with Jack that #Bitcoin incentivizes renewable energy
- On May 11th, his latest tweet before this was a poll where he asked if Tesla should accept $DOGE as a payment option; which is also a Proof-of-Work coin
3/9 Then there's also the inconsistency that Tesla is apparently still comfortable holding #Bitcoin

As pointed out by @yassineARK, its energy consumption is there to secure past transactions

Are they THAT unaware, or is something else going on? 🤔

Read 10 tweets

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