At $100k, 57% of all the dollars invested in Bitcoin are now underwater

We price every coin when it last transacted onchain, and this helps us interpret sentiment based on our recency bias

We don't think about our coins from prior cycles as much as the ones we bought 3-days ago 63% of capital invested has a cost basis above $95k.

$95k is what I believe is the bulls last stand, because as price falls below that level, unrealised losses will swell significantly.

Losses are -$20B today, and this is around 3% of the market cap in relative scale.

For those of you around in the 2021 #Bitcoin bull market, you will remember the massive derivatives led deleveraging events which killed it.

Are we seeing a derivatives led flush out today?

I don't think so. 🧵🧵

Funding rates have cooled off gradually, not violently, which is very healthy to see. It suggests we didn't see a massive futures margin call yesterday. We can also see that #Bitcoin Futures Open Interest has declined over the last year in $BTC terms.

This compares OI to market size, and shows a relative leverage reduction.

Coin-margin is also half of what it was in 2021 which removes downside convexity risk.

Investors are motivated by profit and loss, no matter the asset in question.

It makes all the sense in the world for #Bitcoin to take a pause here given MVRV reached +1 sd levels, where numerous major corrections/peaks were hit in the past.

🧵🧵🧵

studio.glassnode.com/workbench/3e5e…
Since MVRV is a derivative of the #Bitcoin Realised Price, we can convert these statistical levels to pricing models.

The +1 sd level 🟥 is currently at $70.8k, which represents a level where many investors see a sufficiently green portfolio to take some chips off the table.

studio.glassnode.com/workbench/e658…

I set out trying to better understand the relationship between #Bitcoin derivatives markets and spot/on-chain.

What I found is they speak the very same language, and as such, the critics of on-chain data are just plain wrong.

A quick thread to explain this particular chart. What is shown above are three traces:

🟠 = Annualized funding rates
🔵 = Annualized 3m Basis
🔴 = SOPR -1 (Entity Adjusted)

The visual relationship is obvious

- When futures lever up, spot is usually realizing profits
- When futures de-lever, spot is usually realizing losses

Thread of a few #Bitcoin pricing models that caught my eye as we hammer out this bear market (floor?).

First off, we are attacking the underside of the 🔴 Short-Term Holder Cost Basis $17.8k.

Note also clustering of all cohort Realized Prices = a homogeneous market of HODLers. The #Bitcoin Mayer Multiple ($19.6k) is signalling that we are back above a 0.8 multiple 🟢.

This is breaking above a level that is historically only visited during the angriest phases of of bear markets, with ~15% of trading days below it.

studio.glassnode.com/workbench/btc-…

Just having a poke around, and there are three exchanges that have particularly weird $BTC balance patterns of late.
- 🟣Huobi
- 🔵Gate(.)io
- ⚫️crypto(.)com

All three have large jumps, drops, or oscillations on the order of 10k $BTC to $40k $BTC. The same can be said for $ETH Balances, noting the weird 'I accidentally transferred from crypto(.)com to Gate(.)io' event.

By and large, all the big exchanges look fairly vanilla across both $BTC and $ETH (no ⛳️).
- Binance
- Coinbase
- Kraken
- Gemini
- Bitfinex
- Bittrex

Appreciate the view mate.

I remain extremely unconvinced with the response, but glad to have at least one.

My responses below:

https://twitter.com/TimBeiko/status/1559218017619156993

I never claimed EIP1559 did increase fees, I claimed it changes the stake share balance.

ETH holders will be validators due to incentives of liquid derivs, this is the economically sound decision.

Environmental cost is horseshit and ESG is a joke.

https://twitter.com/TimBeiko/status/1559218017619156993

Ok Folks, this thread on why I believe the #Ethereum Merge is a Monumental Blunder blew up.

I have not had a single Ethereum person respond with a convincing counter.

Here is a video I prepared with my full scale, good faith case outlaid for discussion

https://twitter.com/_Checkmatey_/status/1558215750422351875

I do not profess to know that I have everything correct.

I also do not need to have everything correct for there to be serious problems.

I did not plan to release this public.

But I think it is an important discussion to have, and nobody seems to be having it.

Drop the Merge.

In one move, the US Government has demonstrated that they OWN #Ethereum DeFi.

Folks, us all a favour, ditch the move to Proof-of-Stake so you don't hand consensus to them as well.

That way, you will live to fight many more days

Unless a regulated chain is what you want fro NGU

https://twitter.com/LefterisJP/status/1558208289514586112

I still cannot understand how the #Ethereum community has not put 2 and 2 together.

Tornado cash is your wake-up call

They have USDC, Infura, and most dapps.

They DO NOT HAVE your miners or block production.

But they already have CEX's and Lido (VCs + node operators).

2+2...

0/
Putting out a chart series of things I am watching in #Bitcoin at the moment for discussion in the upcoming Twitter Spaces.

https://twitter.com/TXMCtrades/status/1478531902030155776

1/

Onchain activity is reasonably grim and low. It remains inside the 'bear market channel' observable in entities, addresses and tx counts.

This reads as tourists have left the building, only HODLers remain

Thinking out loud🧵on #Bitcoin DeFi

I'm a Bitcoiner first and foremost. It's the economics, scale of problem, and hunt for a better world that keeps me here.

Hold handful of alts in size ( $DCR, $ETH, $COMP, $STX) and have used a good whack of Ethereum DeFi and NFT markets

1/x I've spent a good chunk of time studying many facets of the technology, from scaling, to economics, to incentives.

I think I've a fair + reasonable grasp

Despite being long $ETH, I dislike immensely the 'financial engineering' of monetary policy

Gas or money --> Choose one
2/x

The #Bitcoin Taproot🌱Activation debate is fascinating to see it play out. Given it is quite a complex topic (Bitcoin governance), let me lay out how I see it and my perspective.

I may have elements wrong but this is my current and best understanding.

Thread👇 Premise:

The Taproot soft fork implements Schnorr signatures and additional output scripts that enhance privacy and functionality, especially for lightning and multi-sig setups.

Overall, the code is widely regarded as uncontentious, well constructed, reviewed and high quality.

@LindenJohan @kenoshaking Right now, how do we get to green tech? Government subsidies because it is expensive and underdeveloped.

Bitcoin mining is EXTREMELY competitive. You a 1 cent per kWh more expensive than the other guy, you are going out of business. It is cutthroat

1/ @LindenJohan @kenoshaking Now where is the cheapest energy?

Green
Stranded (unuseable)
Wasted (overbuilt hydro, gas flaring etc)

The best miners will setup + innovate on the above. They create a DIRECT non gov subsidised incentive to setup green, wasted or stranded energy capture and price out fossil
2/

0/ It has been a hot minute since I let loose my thoughts on #Decred. Combination of taking a break from CT and life throwing lemons.

Enjoyed watching community and stakeholders engage and keep up the discussion

But an on-chain tweet-storm is long overdue!

Seeking Conviction👇 1/ Start with the big picture.

DCR/BTC price has been absolute carnage...

..but we have been here before.

You see Decred is primed to become an oscillator, outperforming BTC in bull markets and underperforming in bears.

The stakeholder block subsidy line is at fractal phase 0

1/ Very pleased to release my next research paper, focusing on the Mining Market Mechanics for #Decred

This was a fascinating study looking at the history, distribution behaviour and performance of the networks largest compulsory seller

Summary thread👇

medium.com/@_Checkmatey_/… 2/ Decred launched into a developed 2016 GPU mining industry where it was dual mined by Ethereum miners.

A study following PoW mined coins supports anecdotal evidence that GPU miners dumped en mass 80% of their DCR.

Chart shows % of DCR income sold (solid) or hodled (dashed)

Time for a #Decred On-chain Update!

There are so many bottom formation + undervaluation fractals at play for #Decred.

This thread covers some of the highest conviction on-chain metrics and the impressive alignment of direction.

Generational confluence on-chain.

Strap in 👇 1/ Miners: As covered in my last research paper, PoW $DCR miners have endured challenging conditions.

With unforgeable costs, PoW miners are known to 'Put the Bottom in'.

The cumulative PoW reward paid (USD) has entered a generational low fractal alongside difficulty squeeze.
2/

1/ An overview of where I see the #Bitcoin market right now. I prefer to use simple yet robust probabilistic methods.

Four Moving Averages have continued to show relevance to #Bitcoin over it's trading history.

#Bitcoins Magic Lines
- 128DMA
- 200DMA
- 128WMA
- 200WMA 2/ Magic Lines
128D MA is a classic Buy the Dip / Sell the Rally.

200D MA is a Strong BUY/SELL unless crossed, then bias must flip. Right now, this is bearish.

128W MA is accumulation signal when below, similar to the Realised Price.

200W MA catches the bottom wicks of bears.

1/I am extremely pleased to present the first of a three part series on critically reviewing the stock-to-flow model for #Decred and #Bitcoin.

In this paper I undertake numerous regression analyses to validate inputs and compare performance age-for-age.

medium.com/@_Checkmatey_/… 2/ I establish fundamental reasons why I have studied #Decred further as a contractor as well as explain the similarities and differences between monetary policies.

I conclude that in the realm of digital, immutable, sound money, both #Bitcoin and #Decred are best in class.

1/ I am studying #Decred in the context of #Bitcoin in the early days.

I aim to assess the following:
- Compare $DCR and $BTC supply characteristics
- Performance of #DCR compared to young #BTC
- Decred unforgeable costliness
- Mathematical rigor for $DCR S2F model

Prelim ideas 2/ #Decred launched in Aug 2016 (~ BTC block 33600).

Given similar supply curve, I have offset $DCR performance by 33,600 BTC blocks and plotted as if #Decred launched side by side with #Bitcoin.

Unsurprisingly, #Decred behaves much like a 'smooth' #Bitcoin without halvings.