Old hands have been selling into this rally since the start of Nov (BTC @$13k).
Here's a more precise view of it:
Dormancy tracks the how long on average the coins have been latent in wallets per coin that was transacted.
This chart filters for only transactions between different investors. (@glassnode data)
It used to be that peaks in destruction or dormancy would be a bad sign for the market as old coins have more experienced masters, thus smarter money; this would predict a price drop. These days not always, OG whales also sell bottoms. Smarter money has arrived.
On-chain HOLDers: 23.4m
Unique users on exchanges: 101m
Total on-chain participants: 187m (upper bound)
PayPal userbase: 487m
So yeah, PayPal is bullish AF.
Full commentary and datasources threaded below, worth reading 👇
There are 23.4m clusters of addresses that represent active (non zero balance) HODLers currently seen on the #Bitcoin blockchain. There is an upper bound of 187m participants that have come in and out of Bitcoin.
Nobody exited Bitcoin before the advent of Mt Gox, the first Bitcoin exchange with traction.
The red line tracks participants, blue line actively HODLing coins. You can see some people sold out after MtGox provided the means.
10% of near Earth Asteroids are more accessible than the moon. Accessibility is measured in energy terms (delta-v, a unit of speed), essentially it's the speed a rocket needs to hurl a probe / mining equipment to intercept the destination.
Delta-v energy requirements (km/s):
9.6 Earth -> LEO (low earth orbit) 6.4 LEO -> Lunar surface 10.7 LEO -> Mars surface
Less than 6.4 from LEO to 10% of near earth asteroids. And to 1.0 - 2.0 to get materials back to Earth.
NVT Ratio, measures Bitcoin's ratio of investor activity to capitalization. I first described it as Bitcoin's equivalent of a PE Ratio.
Presently NVT is at undervaluation levels equivalent to the COVID19 white swan price bottom. Very bullish.
“Investor activity” is predicated on on-chain volume. This is because when BTC moves between wallets between two different participants, we assume there was a payment for it off-chain (fiat or alt-coin). It’s an imperfect measure but approximates what’s going on.
As more volume continues to trend off chain into layer-2, NVT drifts higher as investment activity becomes invisible to the chain. I tried many methods, the best was simple long term moving averages to track the new zones of buy and sell. It works if the L2 trend is gradual.
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.
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.
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).
A couple of years ago Bitcoin was marketed as the new uncorrelated asset, thus fund managers really needed to have it as part of their portfolio else they would not have a portfolio that would be hedged for all situations.
BTC was uncorrelated because there was a firewall between traditional macro investors and Bitcoiners. That's to say cypherpunks, tech-heads, purveyors and consumers of illicit drugs, and die hard libertarians are NOT typically the guys moving money in macro markets.
Another impulse of coins changing hands has completed, the next directional move over the coming weeks is likely upwards. It's very unlikely we'll see any kind of a catastrophic dump in price from here.
BTW, the previous chart was an expansion of this tweet from over a week ago. "Local on-chain switching bullish"
I'm still cautious of another short term dump to fill the gap but so far it's looking like it's been front run for liquidity which is strongly bullish if we break resistance here. There's a lot of bids in the spot orderbooks wanting to snap up the gap in the mid-high 9000s.