BTC % volume in profit (30D):
This is a slower forming bull div to keep an eye on.
% of volume in profit inflects and puts in HH before price does. There’s nuance to this but more than I can fit in tweets. Will continue to watch this.
To be clear, it hasn’t formed yet. See attached for 2015, 2018, and current.
In 2018, it really provided the best signal given that price had not yet broken to the upside but %V in profit was aggressively moving up.
This is not particularly different from using metrics like SOPR which do represent the profitability of volume. It’s just another way to slice the data and improve our view of context.
There is also a relationship between new entities and the speed at which SOPR and % volume in profit form their reversals.
This is because new entities have a lower cost basis and bring aggregate profitability of the market higher.
Fwiw this is literally the mechanic behind how macro bottoms form and on chain provides full visibility into that happening.
@micmat02 Now if you were just looking at the bottom level and thinking we need to hit it (30%-35% volume in profit), then price falling would get us there faster.
But hitting a specific level is arbitrary whereas a reversal pattern in profitability is the mechanic that forms a
This post is based on this twitter thread.