#22 Tweet To Flow Model
Prices chop sideways. What do the Crypto Twitter experts have to say?
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What We Are Watching
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@100trillionUSD gives us an update on his now famous Bitcoin Stock to Flow model. If you are unfamiliar with the model it looks at current circulating supply and compares that to newly added supply. We see the stepping up white line on the chart because Bitcoin’s supply distribution is programmed to be cut in half every 4 years. This model currently predicts $288,000 Bitcoin within the next 4 years.
Here is an interesting distribution from @glassnode. The red and green squiggly line shows how much Bitcoin is being sent to and from exchanges. @haal69k has observed that this is a lagging indicator. The price appears to correct before this indicator moves. It does not look useful for predicting price movement. However, that does not take away from the data being interesting as a general study of Bitcoin market dynamics.
Again, here is another interesting bit of data, but we don’t think price needs to be overlaid on this chart. What’s the take away? More Bitcoin than ever is being moved off of exchanges. It is incorrect to draw the conclusion that this must mean this Bitcoin is not going to be sold. It’s actually relatively easy to move Bitcoin back to an exchange and sell it. Even a large holder with a complex custody solution could easily move their coins back to an exchange. These coins could also still be traded OTC or traded in decentralized exchanges.
Back to the price action. This is a cool indicator. The chart on the left shows the breakdown of the candles on the right. It shows you the amount of buying and selling within the candle. In this example a large number of buyers came in and bought the top of a wick. The price then slowly fell as they were the last buyers in the market at the time.
We are calling Bullshit here. No way this percentage of people ACTUALLY measure their portfolio’s success or failures in BTC. It can be nice to see how much a portfolio is worth in BTC, but at the end of the day USD is needed to pay taxes, buy food, clothes and shelter. We do believe that @bitcoinpanda69 uses Clout as his unit of account.
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