More Updates on BTC Price Models

Willy Woo published a new model: Cumulative Value Days Destroyed (CVDD).

And he also made some updates on other Price Models using data from coinmetrics. This data provides a new vision for The Bottom of this Bear Market since they are clearly more Bullish than the previous.

Puell Multiple

Another type of metric, which has recently gained some attention in the Crypto community, is the the Dollar Value of Mined Coins on daily basis or Bitcoin’s Daily Issuance. This metric proved to have consistently identify all the swing lows based on previous All Time Highs like clockwork. This relationship held for the two major, halving associated, bull-bear market cycles as well as the several shorter ones during the early years.

This metric shines a light onto the other side of the coin from the proverbial Hodlers of Last Resort, namely the Compulsory Sellers and thefundamentals of mining profitability that are at play in shaping Bitcoin’s market cycles. David Puell’s simple yet ingenious idea of adjusting this metric by its yearly simple moving average has produce a new, powerful and elegant tool to gauge the market cycles from a Mining Profitability/Compulsory Sellers’ perspective.

cryptopoiesis

Major Mayer Multiple

BTC Mayer Multiple is a great indicator but today we also need to ponder alts price action. Considering this we developed an adjusted version of the Mayer Multiple (our Major Mayer Multiple) replacing BTC with Total Market Cap from 2016/2017 and also introducing a second Moving Average. This changes may not be enough to detect reversals in the next cycles but they give more accuracy than focusing only on BTC.

Major Mayer Multiple Example #1 on tradingview

This indicator is quite configurable so we provide clues about some settings you can adjust as you want…

  • SMA #A – Default Mayer Multiple SMA, can be changed from 200 Days to something else.
  • SMA #B – Adjusted Mayer Multiple MA for more details, this daily SMA can be lower or higher than the previous.
  • MMM EMA – Major Mayer Multiple EMA colored line for a smoother visualization. If this EMA is set to 1 it will essentially match the Major Mayer Multiple Area. Low values tend to be more interesting but even a 200 EMA can give you lagging entry and exit points for larger time frames. This EMA is calculated based on the current time frame (of your chart) and not on the daily basis.
  • Color Length – Color length of the MMM EMA, it will help to adjust how the colouring of this EMA is made. For instance if MMM EMA is set to 1 and Color Length to 1, every time the EMA increases the line will change. This setting essentially exists to reduce noise when the direction changes for few ticks.
  • Upper Band – Upper limit, triggers a color change on the Major Mayer Multiple Area.
  • Lower Band – Lower limit, triggers a color change on the Major Mayer Multiple Area.

Script and Examples

GBTC downtrend breakout soon?

GBTC (Grayscale Bitcoin Trust) may not be the perfect example but it’s one of the many showing a potential break or if it fails further and quicker moves lower. As mentioned previously we have many indicators and patterns suggesting big moves for the next weeks/months and better to monitor them all than be sorry.

Daily GBTC

BTC+LTC+DASH MVRV

In 2014/2015 (previous Bear Market) BTC represented more than 80% of the Total Market Cap but today this value is below 60%. Considering this and because we don’t have enough data to create a MRVR ratio for all the major cryptocurrencies (calculated by dividing the Network Value by the Realised Cap), some of them didn’t even exist, we will work with BTC, LTC and DASH using Coimetrics.io.

BTC+LTC*DASH MVRV

What we can clearly notice is how the cryptocurrency market dipped without giving much fight probably because we have more experienced traders and investors (fighting less the downside). Something also interesting is how the Market Cap was quite stable above the Realized cap and then we saw what can be consider has the final capitulation (many will disagree on that but looking at the MVRV ratio we can see a strong reaction at the same lows).

Nevertheless the big questions remain the same. Will we go lower? Is this the bottom? Will we see a W shaped bottom or something else? Looking at some patterns on this MVRV Ratio we can expect something different and probably with less downside as we move higher (if we can keep moving higher). In 2015 the Realized Cap was tested 2 times on the way up, before a break (on the third attempt) but on the way down the Realized Cap also was a strong support while in this Bear Market we didn’t saw the same behaviour.

Big moves for the next weeks/months…

Many indicators and patterns suggest a big move in the cryptocurrency market in the next weeks/months. One of this patterns is quite visible on BTC Dominance chart. For the last 200 days a triangle is consolidating and a break is quite imminent since we entered the last 25% of this formation. Breaking down would trigger an alts season, breaking up may trigger further lower lows for alts and probably also BTC.

BTC Dominance Trends on tradingview.com

Until now Total Market Cap still holds where we expected but moving higher or lower also suggests more price action than what we had in the last days.

Total Market Cap

Bitcion is saving families

The cryptocurrency space is so full of speculators that some people don’t even understand (or forget) why cryptocurrencies have a fundamental/intrinsic value for many more.

CIUDAD GUAYANA, Venezuela — On Tuesday, I went shopping for milk. With the chronic food shortages in Venezuela, that errand already is very complicated, but there’s an extra layer of difficulty for me: I don’t own bolívars, Venezuela’s official currency.

I keep all of my money in Bitcoin.

Carlos Hernández (Venezuelan Economist)

Living in countries where the economy is collapsing and the most reliable way for people to save some of their funds is running out of the banking system should be enough for a Nobel Prize. Obviously Bitcoin volatility is still high but we are very far from Mass Adoption (and price stability) but when this will be achieved we can foresee a few “stable coins” not pegged to USD or whatever but stable because many will use them as main currencies.

The current banking system is dying and they know it or they wouldn’t adopt or ban cryptocurrencies… In 50 years no one will remember what bank notes are, in 20 years everyone will have some cryptocurrencies and/or tokens no matter how they use them.

Early last year, he started doing graphic design and translations online. But most websites pay for freelance work through PayPal and the like, which we can’t use because exchange controls here allow Venezuelan banks to use only local currency. (For the outside world, even those of us who have bank accounts here are effectively unbanked.) So Juan had to turn to cryptocurrencies to get paid.

Thanks to those earnings, he started thinking about leaving Venezuela. He was able to buy what he needed for the trip to Colombia: clothes, a backpack, a smartphone. He put some money aside. He even gained a little weight, an anomaly around here these days.

Cryptocurrencies also helped him during the four-day trip itself. Venezuelan military personnel at the borders have a reputation for seizing the money of people who want to leave, but Juan’s, being in Bitcoin, was accessible only with a password he had memorized. “Borderless money” is more than a buzzword for those of us who live in a collapsing economy and a collapsing dictatorship.

Carlos Hernández (Venezuelan Economist)

Total Market Cap Update (cont.)

Following our last post we saw the expected pullback (sooner and quicker but still expected). Total Market Cap is now testing the support mentioned and for any Bullish continuation we need to stay above 125B Market Cap and also above the 50MA (yellow). If we have a confirmation on this line turning into support (as it seems) we may break the green broadening wedge sooner than later nevertheless if we fail we need to consider a test of the previous low or even a new lower low.

Daily Total Market Cap (50MA yellow, 200MA red)

BTC is also holding where it should and the assumption is the same… we need to hold this levels for more upside action.

12H BTC