Topic: The greatest analysis of Bitcoin! EVER (Read 399 times)

This is really a great help for traders who are really making hard to understand the technical analysis. A great detailed and worth to read. Already bookmarked this thread as I will be using this information for my future trades. Since I have been using only those simple and uncomplicated indicators.

Anyway, thank you for your great effort, mate.

Well, this is a very good post and I am sure it's going to help a lot of persons in the crypto space, though my problem is that this article is not so user friendly because not everyone can easily understand this languages, a lot of persons will complain about not understanding what you are talking about, even though the content of the article is so good, but apart from this, I think you taking your time to compose such without getting paid is a very good development.

I am all about TA but i can't torture myself and read all that, you could have summarized everything in a single chart with a few sentences to describes how your analysis were conducted.

The greatest Bitcoin analysis means you are putting so much effort to make this topic and it will be seen by me while reading the topic and pretty much the production also same with the future and the possibility of changing the economy will also been in the hand of Bitcoin so I agree that.

Liquidated shorts might seem like a good thing, but actually aren't. The more shorts there are, the more support there will be when we're about to break out in form of a short squeeze.

A short squeeze provides that extra fuel the market needs to break through firm resistance levels it otherwise wouldn't be able to break through, or at least, would need a whole lot more time and demand for to do so.

Bitfinex shorts are still at nearly the lowest point of the last 12 months. I'm uncomfortable seeing the short side be this poorly represented. People are either bullish or neutral, but the better outcome is more bearishness.

Well, this is just a simple analysis based on the previous results of the price of Bitcoin. So it is better for someone who needs to make an advance move in the market to predict what would happen next if they were active traders. But it's better if you have experience and idea about the market before to easily cope up with what could possibly happen next.

So much work are going on your prediction and the analysis about the Bitcoin in the future if it was not true also the topics attract everyone to get interested about the current scenario of investment and it will definitely helpful for the new people to get interested and make the investment on Bitcoin.

First of all thank you for your whole time about spending their analysis of Bitcoin very very helpful for me to find what happened in the future and it will give the 99% confidence in me to get invested and make Minecraft in the future

Appreciate your thoughts and this research-based market sentiment analysis. After the liquidated shorts, we will be able to see green in the crypto market but institutional investors should support us for this purpose.

I done the same you did buddy! I believe we could find the market grow again even there was a dump in the crypto market but this analysis about bitcoin purely relay on one coin and it is factors to know while investing and hodling it.
Mostly newbies does not know anything, for those people this analysis is really helpful. Good post op.

That's what I expected to be one of the replies here. I too had difficulty breaking down what the OP is saying. Too much technical analysis, but thanks for the share though. I'm sure more technical person can really breakdown some of the terms here and could explain in lay man terms because not everyone is fully adept with the knowledge of TA.

It's never a smart move to relay on other people's research  for developing trading strategy but you can you use them as pointer to carryout more research or my favorite, carryout your own research. The cryptocurrency market is still very volatile and new for  any other strategy which doesn't involve hodling to produce positive outcome always that includes trading. That been said, nice, quality post OP, it was quite interesting to read.+1 from me.

Normally, the results of huge calculations and findings could be expressed into a few lines called results or abstract. I do not think that anyone here would pay a heed to what you have written here.

Though it might no doubt be the greatest analysis of all time, but I would love to let you know that in forecasting the high growth periods, I am seeing an immense rise and never a fall and I am unable to understand if it what happens. Do not you think there is always a difference between theoretical results and real market results.

This is a very long analyze, and I agree with it, that finding out when whales sell their coins and especially when they are finished selling would be a great knowledge to have. We also know that miners will have to sell each day to finance their work, that's 1.800 bitcoins each day.
To be honest I didn't learn anything from this analyze. So it wasn't that great!

Unfortunately, my psyche does not allow me to trade in Forex! I provide information only for general understanding only ...

That could be good as other information for people to do their own research and draw the chart. But I am not yet fully understand with the analysis, and I guess I need more time to understand. I hope that you can make it more simple so we can understand what your means and we can learn from yours. And I guess that you are familiar with forex trading because I see that you can make a prediction without any trouble. Or maybe I am wrong.

Anyway, my interest went to the caption, " who is selling are they dine"
Sometimes I read about that too from forex sites, interpreting that meaning some people are selling and the next is to buy but I don't believe in such analysis because it is capable of deceiving someone to buy while market can remain bear for the other month.

But there is nothing as greatest analysis in my angle.

This results in a cluster of dates that indicate a bottom in Q1 2019

This is a summary analysis, but not a "positive" one.

I merited this post for the sake of effort showing up these analysis but overall i dont believe on any TA and theres no such thing about the greatest analysis ever on bitcoin yet all are just speculative ones.
So dont expect that it would be precise nor it would happen again basing on what you are currently seeing.

With so many technical indicators imported from forex, I don't think it is a bad idea to use something unique to Bitcoin as an indicator. All predictions aside, using the age of UTXO as a tool makes sense, at least to me. However, it might be too early to say anything definitive, because it seems to me that you don't have enough historical data to be able to make firm predictions. It would be interesting to see what happens after a couple of more cycles, if your conclusions would stay.

I personally believe it is a theoretical one built on nothing. All this is tendentious and is built only to "prove" that btc is ready to go up.

Imho I think this will be invalidated like all the other "constructions" on the 6k.

The truth is that the adoption is far away, and if we do not make BTC less volatile, simpler to use, more USEFUL, there is no analysis to take.

The most ridiculous thing about all these "positive" analyzes is that they bring BTC to go up forever forever, doesn't it seem a little strange to you? All this is justified by the fact that BTC is deflationary, but it cannot be the only reason that btc will be able to rise.

I'm not saying that BTC is finished (otherwise I wouldn't be here), but I think the bear market will still be long. In my opinion, any comparison with previous years and previous technologies is a huge mistake.

hello good post and info, but I still find it difficult to understand, maybe you can conclude so it's easy to understand, thanks

Please refrain to quote a whole post especially if it is so long post with many images. Just post normally without quote of quote some parts of the post that you are going to reply based on your interest. OP is just sharing what he found imho, so it is not his own work. It is a long article to read and probably not really good for beginners as it might give confusion to them. I myself will need to read it many times first before I can understand it.

This concept was previously posited by Unchained Capital in their Hodl Waves Analysis piece. We expand on this analysis to identify when selling pressures will likely wane to forecast the timing of upcoming market cycles. Below, you can find the key takeaways we provide rationale.

Function of UTXOs In Our Analysis
UTXO stands for the unspent output from bitcoin transactions. Without going into too much detail regarding how Bitcoin's record keeping model functions, every transaction creates a new UTXO and the age of the UTXO indicates the block that it was first included in. In Layman's terms, the UTXO age indicates the last time bitcoin was moved.  Analyzing Bitcoin's aggregate UTXO age distribution over time provides insight into buying and selling patterns through previous market cycles, along with where we stand now, and what we can likely expect moving forward

Key Takeaways
There have been consistent trends in UTXO age distribution and how that distribution relates to time and price.
Lost coins likely make up a significant portion of 5 year+ holders, which helps function as a plug when backing into the movement of other UTXO age bands (since it's a zero sum game)
Selling pressure from long term holders, primarily those holding between 3-5 years, is almost exhausted.
We're seeing another accumulation process by longer term holders begin, similar to the one at the end of 2014
Using the timing of previous price bottoms relative to different bitcoin accumulation points, we are able to use current UTXO dynamics to strengthen our forecast of a rough date for a price bottom (sometime in Q1 2019)

UTXO Analysis & Market Cycles
The purpose of this chart is to illustrate the underlying movement of specific bitcoins through previous market cycles using UTXO data

Methodology: The black line represents the price of BTC on a logarithmic scale and the green line shows the percent of bitcoin UTXO’s that have not been used in a transaction in at least a year. We will refer to this line simply as the "UTXO line". The boxes1 sectioning off portions of the UTXO line begin with times where it grows significantly, and end after said rapid growth tapers off in that cycle. In order for a coin to move into the 1 Year+ UTXO band, it must be untouched for at least one year. We section off the corresponding box2 on the price chart that indicates the price at which they were last moved to provide timing context. The trend here clearly shows the rapid growth in the UTXO line corresponding with boom and bust cycles. As we saw at the end of 2017, continued price appreciation leads to a rapid influx of new users/additional money into bitcoin, often deep into a rally, subsequently followed by a significant price collapse. In other words, these individuals became the “bag holders” of their time.

Movement Across UTXO Bands
Now we introduce lines that represent coins that haven’t been moved in 3-6 months and   6-12 months. In both instances you can see the untouched coins shift from the 3-6 month line 1 to the 6-12 month line 2, and then eventually into the 1 year+ UTXO line3. After these shifts, the UTXO line plateaus as we enter a brief “quiet period” where price remains steady. Following this “quiet period”, the UTXO line slowly begins to climb as we approach the next block reward halving, represented by the thin vertical line. Although there’s a clear reduction of natural selling pressure from a block reward halving, it’s difficult to isolate its direct impact because market participants likely price it in. It’s important to note that, collectively, these bands represent the total distribution of coins, so they must all sum to 100%*. We can use, both, the timing and wave height of preceding band shifts as indicators for upcoming band shifts. This is because a coin can only shift bands in two ways: either (1) to the adjacently older band as it remains untouched or (2) to the youngest band if it has moved wallets. In other words, declines in any UTXO line can happen immediately while growth is lag dependent on the time frame.


Who's Selling & Are They Done? (1/3)
We've established there is a reduction of natural selling pressure from the reward halving, but it's also important to address another major source of selling: long term holders. The 1 Year UTXO line only changes when coins that haven’t been moved for a year are moved (UTXO line goes down) or when coins cross the threshold of being untouched for less than a year to over a year (UTXO line goes up). Actual movements across these bands can only be analyzed through the individual time bands that make up the 1 Year+ UTXO line, which we breakout into 1-2 Years, 2-3 Years, 3-5 Years, 5 Years +*.
 Applying this analysis to the most recent decline, we can get an idea of where the selling pressure is coming from and approximate how close we are to selling exhaustion. As the price started taking off in early 2017(1), we saw a simultaneous decline in the 1 year UTXO line2. This was indicative of people likely moving their bitcoin to exchanges to sell it.  Looking at the same time frame from a UTXO perspective (captured by the blue box), we see the 1 Year UTXO line drop from ~58% to ~41%.  During that same time period, the 5 Year+ remains nearly flat3, going from ~2.8 million coins to ~3 million coins (most of the change is a result of the increased supply). Chainalysis completed a thorough analysis of likely lost bitcoins and came to an estimate ranging from 2.78-3.79M coins. Although these coins were lost throughout bitcoin’s history, the majority were lost early on, especially given that the person(s) known as Satoshi Nakamoto accounts for ~1 million of them. This implies that a significant portion of coins in the 5 Year+ band are lost. The rest of the lost coins will progressively make their way through the bands in a similar fashion, ultimately ending in the 5 Year+ band.


Who's Selling & Are They Done? (2/3)
Building off this assumption, the 5 Year+ band can function as both a plug and an amplifier for our analysis . As previously mentioned, there are two rules that coins must follow when moving through this chart: they either move up to the following chronological band over time or they reset to the beginning if they are moved. With each cycle bitcoin goes through, lost coins will make up a greater percent of the 5 Year+ band as some long term holders sell at prices they believe are too expensive at any given time.The 5 Year+ UTXO band functions as a grounding constant because as it’s increasingly made up of lost coins, so it becomes a more suitable variable to be used to back into the movement of previous bands. The amplifier effect is based on the idea that a small decline in the [color=lightblue5 Year+ band[/color] can be attributed to a potentially sizable percent of actual 5 Year+holders  (those who have control of their coins) selling. It also implies most coins in this long-term band are unlikely to move because they are, indeed, lost.


Who's Selling & Are They Done? (3/3)  
A key takeaway from combining these concepts is it doesn’t require much coin movement from the 3Y-5Y band to the 5 Year+ band to create an uptick in the latter since a small percent of 5 Year+ UTXO coins have the ability to move. Logically, declines in the 5 Year+ band imply very few coins from the 3Y-5Y band were held and moved into the 5 Year+ band. We can safely assume the primary source of selling came from coin owners who’ve been holding for 3-5 years given the combination of a:

1 - massive reduction in the 1 year+ UTXO
2 -  flat 5 Year+ UTXO
3 - minimal decline in the 2Y-3Y UTXO
4 - significant uptick in ≤ 3 month UTXO (only shown in mini image)
5 - significant downturn in the 3Y-5Y UTXO that coincides with 1 Year UTXO1

Another important takeaway is we can assume these older owners have exhausted much of their selling efforts, evident in the flattening of these older UTXO bands, coupled with the 1 Year UTXO band reaching a floor and staying flat through the first half of 2018. In the second half of 2018, the 1 year UTXO band began to exhibit a positive growth trajectory directly in tandem with the 1-2 Year band   as older UTXO bands remained flat. We’re seeing an accumulation process now similar to the one at the end of 2014. This would imply a bottom is in sight.


Forecasting Future Cycles
We use historical price cycles for bitcoin to find logical and consistent trends we can extrapolate forward in order to forecast the timing and UTXO composition of the next holding cycle. For example, to forecast the expected 1 year peak holding rate, we looked at how the wave height of the 6-12 month line2-1 affected the 1 Year+ line in the previous two cycles. More specifically, we compared the wave height of the 6-12m line2-1 to see what portion it made up of the 1+ Year wave height blue-red. and what portion it made up of the wave height of the 1 year+ line acceleration point  to its peak blue-3. The 1 Year+ acceleration point 3 shows when the 1 Year growth starts to really pick up, which typically coincides with the peak and subsequent downturn of the 6-12M line as those coins shift into the next band.


Forecasting the Peak Hold of the Next Cycle
The leftmost columns have the dates and values of the bottoms 1 and peaks 2 for the 6-12 month line (the wave height of each cycle can be found at the bottom). The third column shows the same metrics, but for the 1 year peak 4 and bottom, while the shaded values are forecasts. The fourth column is calculated in a similar fashion to the third, except it uses the point where growth starts to significantly increase 3 as its starting date, not the lowest point in the cycle.
 In the bottom section, we show the 6-12 month wave height as a percent of each of the prior 1 year wave heights. There is a strong consistency across both years when comparing these to one another. The 6-12M wave height in 2012, for example, was ~65% of the of the corresponding 1 year wave height that year. The 6-12M wave height in 2014 was also ~65% of the corresponding 1 year wave height that year as well. On top of that, these same 6-12M wave heights both made up ~86% of the “fast growth” 1 Year wave height.
Our sample size is obviously limited, but the consistency gave us a bit of support applying that trend to the 6-12M wave height in 2018 to come up with a rough estimate for potential peak of the next wave.  We take the 6-12M wave height, divide it by its average portion of the 1 Year wave height, and use this as a proxy to get our estimate of the 1 year wave height. That value is then added to the base of the wave to get to our estimate for the peak of the next cycle.


Forecasting the High Growth Holding Period
Most of the factors in this table are the same as the previous one, except now we’re solving for the high growth slowdown5. This is illustrated by the right side of the dotted box. The 6-12M wave height in 2012 was 78.87% of the "fast growth" wave height that year while the 6-12M wave height in 2014 was 75.89% of the "fast growth" wave height that year. That same 6-12M wave height made up 112.87% and 107.58% of the size of the changes in the dotted box in 2012 and 2014, respectively. These results are, once again, highly consistent, so we used them to forecast the level at which we believe high growth will end.



Forecasting Dates Using Slope
Using this data, we can start to formulate a forecast for the dates of these events.   One significant uniformity we noticed across both cycles was the slope from the bottom of the 1 Year+ UTXO line to its peak. Breaking this slope into rise/run, rise is the 1 Year+ UTXO growth and run is the amount of days that pass. The actual trajectory of this UTXO line is certainly not linear, but the low and high UTXO points of each respective cycle can be plotted on a very similar slope. This implies the daily UTXO growth was extremely similar over the course of both cycles. Here are the calculations for the slope of the first and second cycle.

Using the slope from the most recent cycle (.00038211) and next cycle’s UTXO peak holding estimate (67.68%) which we derived in the previous analysis, we can rearrange the slope formula to solve for the expected date.

This is how we arrive at April 17, 2020 as the date of the next peak. Visually you would assume the slopes are closer to 1, but it’s important to keep in mind that we’re using a different unit in each axis. The important aspect is the consistency


End of the Next Cycle & Beyond
The length of the 1 year+ UTXO rapid growth period is roughly based on the duration of growth in the preceding 6-12M period because it’s those same holders that are now transitioning into this longer-term band. Using the previous cycle as an example, we see the 6-12M line rally in 2014 span 152 days 1 from April to September. As that concluded, the 1 Year+ UTXO line rapid growth period spanned 163 days 2 from November 2014 to April 2015. It makes sense for the end 1 Year+ UTXO band to have a slightly longer growth period since it functions as the final destination for these untouched coins, while the 6-12M band is more of an intermediary. The recent 6-12M build up spanned 244 days 3 from January to September 2018. If we assume the current 1 Year UTXO growth follows a similar trajectory as past cycles, it implies the high growth period ends on April 18th, 2019 (4)
 The date and UTXO floor holding rate are the remaining factors that need to be forecasted to complete the cycle. It's difficult to be confident in a forecast for a date this far out. Assuming the linear change in the 1 year UTXO peak dates is consistent across cycles, we can attempt to extrapolate the remainder of this cycle using the timing of the previous cycle as our base.  This would put a rough estimate for the UTXO floor in Q4 of 2022(5). We believe this will be the last cycle to follow this near linear trajectory as cycles will lengthen at a faster rate than the UTXO peak increases. An obvious reason for this is that the UTXO peak has a fixed ceiling, while the cycle lengths do not. Some factors we believe will contribute to a lengthening cycle are a maturing market and incrementally diminishing effects on natural selling pressure from block reward halvings
 We also believe the level of future 1 year UTXO floors will increase at a decreasing rate. Using historic trends, we can model an approximate level for the 2022 floor of 45%(5). These values will eventually reach some sort of equilibrium floor, but that’s well beyond the scope of our forecasts.  Market maturity and increased adoption should dampen both short and long term volatility over time. As long term volatility declines, the size (% change) of price rallies and dips will not be as significant, likely leading to less individuals trying to time the market in hopes of making major gains. We also hold the view that increased adoption of the lightning network will lock up bitcoin in nodes that will most likely not be traded as much through market cycles.


Conclusion
The purpose of this analysis is to provide insight on bitcoin holder patterns to improve our educated guess on the timing of the price bottom. We don’t believe this analysis should function as an indicator on its own, but rather that it be used in combination with other relevant data to make the most informed decision possible. We’ve established that selling pressure from long term holders is significantly tapped, and accumulation has begun. Using the timing of previous price bottoms relative to different bitcoin accumulation points, we can use current UTXO dynamics to forecast a rough date for a price bottom. We specifically tracked the price bottom relative to the 6-12M holding peak 1, the forecasted UTXO 1 year+ holding peak 2, the existing UTXO 1 year+ holding bottom 3, and the forecasted slowdown point of the 1 Year+ UTXO growth rate 4. This results in a cluster of dates that indicate a bottom in Q1 2019(5)


Sourse: Delphi Digital

Disclaimer: This is not an investment advice. Please do your own research before investing in any avenue. The information contained in this post is for informational purposes only.