1/ BTC, monthly update
In this thread: 🔥On-chain outlook 🔥Top signals, what am I looking for? 🔥Top targets
RT’s appreciated, let’s go!
2/ First of all, I am absolutely no expert at all.
I won’t advise you what to do. I just compiled a thread, to let you create a general outlook for yourself. I do also write what I think, but those are in the end just thoughts.
3/ In this thread, I try to compile everything together, to see where we are in the current Market Cycle.
I try to explain why I think the most exciting parabolic phase of all Bull Markets is about to happen in the next few months.
Read it all and ask yourself if that’s true!
4/ Starting of with a daily chart of BTC
The price is hovering below the ATH. This year, we’ve witnessed 3 Bearish market structures on the Daily chart, imo.
May- July September November
I think the last one we’re currently in, is about to end.
5/ First, I want to take a look at the current Market sentiment.
It took a decent hit.
It’s kinda funny to observe that the market is fearful, with prices just below 60K.
In the uptrend, at same prices, the market was greedy. Funny how it always works this way.
6/ It goes hand in hand with declining funding rates. Falling sentiment = falling funding rates.
When BTC trends lower, people are more scared to long, as time goes by.
Bottoms often form when funding is near the baseline or negative, based on the trend before the decline.
7/ While in an uptrend, the opposite is the case.
Masses then Long their Longs, like there’s no tomorrow.
Funding quite baselined now, just sayin’
8/ Let’s keep the focus on the masses, versus ‘Smart Money’ in the coming tweets.
In all former Bull Runs, when BTC broke above it’s previous ATH, Smart Money starts distributing, while Dumb (Retail) Money buys those coins and pushes Bitcoin into the parabolic phase.
9/ We should see the start of this right now.
‘Number of active addresses’
The more retail there is around, the more activeness there is. Retail gets scared/disinterested at bottoms.
It took a massive hit in May, but is in a slow, but not euphoric, uptrend right now.
10/ The number of addresses holding more than 0 Satoshi’s.
It grows during an uptrend, steepens in the greedy phase and stabilises during a downtrend/whale accumulation (more about that later).
It’s just re-starting the uptrend, but no greed to see here.
11/ In general, the smaller the investor, the less experienced, thus the more noob ‘he’ is.
Those Plankton wallets get extremely greedy near tops.
Again, just a small uptick, so that’s bullish for us, the smart investor. Extreme greed for mr Plankton has a long way to go.
12/ I hear you thinking, but Phoenix… investors with a bigger wallet are also part of that previous chart.
Correct, but they are just a small part, when you look at the amount of wallets.
Biggest bunch of wallets is by far the low-amount-stacker.
13/ Investors with more than 10 BTC in their wallets should be considered way more experienced, thus smarter.
As you can see, they tend to distribute their coins in the latest phase of an uptrend.
That hasn’t really begun yet, as to this metric. And that’s bullish for us.
14/ Biggest whales should be the smartest ones, right?
Well, indeed they are, but they aren’t really offloading at these levels. Bullish
15/ Total addresses is approaching I billion, in the middle of the all wanted S-curve for global adoption
Course, this metric is kinda hard to read, as one can have as many BTC addresses as he wants,though this number shall most probably keep on rising hard in the coming years
16/ Percent Balance on Exchanges is still in that downtrend since March 2020.
The only real uptick was the capitulation bottom in May.
There is less and less % BTC available for the growing demand. Do the math.
17/ Also visible on ‘Exchange Net Position Change’
When BTC broke above ATH eo 2020, we saw it turn positive for a bit, like we saw this time when Bitcoin made a new ATH in October.
It amazes me in a good way that it turned into deep negatives again here.
18/ Here visible on all the exchanges apart from each other.
19/ And here with the amount of coins on exchanges, which declined from 3100 BTC in March 2020 till 2450 BTC today.
Sure, the cost of 1 Bitcoin also went up, but I read all of this about exchanges as ‘Bullish’
How about you?
20/ The inflow of volume is so insanely low right now, it’s like a bear market, but with the price being ready for a massive moonshot.
Yes, I know I drew a D here (I saw that later lol). It’ll provide the shot needed, promise.
21/ Number of transfers to exchanges in a slight uptrend, but still fairly low.
22/ In a market, there are also people who take profit.
Well, exchange withdrawals metric doesn’t suggest a macro top at all here.
23/ In fact, it’s really quiet at the exchanges. And that’s a good thing, because in the greed phase, it has to be chaotic and full of enthusiasm.
It’s quiet before the (good ) storm.
24/ Is there any profit taking?
Let’s have a look in the coming tweets. Smart Money should be starting distributing their coins, which will take months to really unfold.
Dumb Money however should be scared at bottoms and greedy near tops.
Let’s look at some metrics.
25/ HODL waves
When the ~1D - ~6M waves go up, % of older coins goes down. Older coins are held by experienced traders, while when coins turn young again, most of them are bought by newbies.
We see a slight uptick here, but it’s only the start.
26/ We can see that profit taking here. It has started, but has been way more extreme during an uptrend in the past. Imo it’s just a start.
There is also a fair amount of realized losses, mostly by the less experienced trader. Explanation of this in other tweets.
27/ Short Term Hodler (STH) Profit/Loss Ratio.
Tends to come down hard near bottoms. STH’s are the less experienced traders who sell at bottoms and buy at peaks.
It tends to often detect local bottoms during Bull markets, really helpful imo.
28/ A near full reset for the ASOPR.
This, or a negative one, in a Bull Market, has often pointed out a bottoming zone.
29/ Net Unrealized Profit/Loss (NUPL)
Has been a spot on greed thus top caller in 2017.
We are far from greed here and it’s kinda logical that we’re in the belief phase in general.
The best for us has yet to come.
Oh and yes, it was also right at the pre-top and macro top in 2013.
And the ones in 2011. A must have indicator imo.
Hash rate taking a little pause here, but that’s the first one since the great migration out of China. Nothing to worry about here imo
32/ Miner capitulation, visible on the Hash Ribbon, often points at bottoms for BTC by the way.
So, we’ve just witnessed a massive bottom zone in that all-known range. On the broader scale, we’ve just left it and are ready for the parabolic phase.
33/ More proof for the statement that distribution has started, but is far from ultimate (greed) parabolic peaks?
CDD: Coin Days Destroyed. i.e.: A BTC that has been held for 99 days, sold on day 100: 100 added to the metric.
An uptrend with peaks here is what you want to see
34/ In the coming tweets, I want to focus on some indicators that help finding a Macro Bull Market Top.
How to find it? Well, all of the tweets before, combined with the next specific ones. A Macro Top is still far away IMHO and here’s why:
35/ A parabolic top is far away from moving averages. The space above the 2Y MA Multiplier has been a great topping zone caller in the previous runs.
It is at 137K right now.
36/ This goes hand in hand with an overheated 200W moving average that is rising with an extreme pace.
Room for growth here too. Getting lukewarm
37/ BTC Macro Tops tend to spend some time in the extremes of the Puell Multiple too.
This metric looks at under- and overvaluations of Miners and their revenue.
38/ The Stock to Flow model, by @100trillionusd
Still right on track on a broader scale.
39/ Golden Ratio Multiplier
Upper band sitting at 138K right now, almost the same spot as the 2YA Multiplier.
Tho, these are based on fibonacci sequences.
40/ Logarithmic Growth Curves
Upper band is sitting slightly higher than the previous one, at 160K. Higher is good, right ;)?
41/ MVRV Z-Score.
Simply put, to determine if BTC is extremely under- or overvalued relative to it’s fair value.
Lukewarm, room for growth.
42/ RHODL ratio getting ready for a shot into the extremes.
It tends to identify a Macro Top to within a few days accuracy!
We still got to greet greed at the ‘Relative Unrealized Profit/Loss’
At ultimate greed, people tend to lose complete sight and leave many profits on the table.
44/ Reserve Risk is also still just warming up.
This metric visualises the confidence amongst Long Term Hodlers relative to the BTC price.
Room for growth, again and again.
45/ If you are still with me here, you probably wonder: when the f*ck is this bird gonna show some real targets?
Well, here we go.
46/ A Macro Top for me is based on everything I described in the previous tweets, combined with historical performance. As you might know, I really like to use fibonacci levels, because some of them can provide future target zones, imo.
In this last part we will focus on the previous market tops
47/ And use that information to try to predict a future top zone target.
Those of you that follow these threads of mine from the beginning know I use these rough HTF charts ever since.
We’re gonna zoom in
48/ Fibonacci levels are plotted from the Macro top to the Macro Bottom in 2011.
The fibonacci extension levels tend to provide some great Macro targets.
On my charts, there is a pre top and a Macro Top.
49/ The Pre Top tops almost perfectly around the 1.618 fibonacci level.
The Macro Top went all the way and landed just above the 2.272 level. Between the 2.272 and 2.618 level, while it was way closer to the 2.272.
50/ The 2015-2017 run gives us 2 kinda ‘pre tops’, where the 2nd one also reached the 1.618 level.
The Macro Top topped almost precisely between the 2.272 and the 2.618 level at around 20K.
Greed level back then was way higher than it is right now btw.
51/ Now look at the pre top during the current run.
Yes, indeed. 1.618.
Guess what level(s) I’m looking at for a top….. Yes Indeed.
52/ A summary, 1/3
The on-chain outlook shows that the distribution of whales has started. At least, we see some metrics telling us that.
It will take a few more months to unfold. During this month,retail will buy those coins and carry the market higher, until a blow off Top
53/ It takes me several evenings to compile all the information, order it and write it as this thread.
If these monthly updates value to you, you might wanna leave a little tip, as all of this remains totally free:
Not needed ofc!
54/ Summary, 3/3
I’ve shown you my top signals and top targets too.
We’re far away from them, IMHO
We’re gonna make it, if you never stop learning.
Please, share the knowledge, by RT’ing the first tweet.
Thanks a lot for that! 🙏🔥
This post is based on this twitter thread.