We all know that nobody can predict the future.
We also know that ‘macro bro!’ is driving much of the recent price action.
However, we can only judge reality based on the data and evidence that is in front of us. Lets imagine that we only had the factual data about Bitcoin on-chain to go off. What can we see?
Exchange balances continue to decline. I know it is a meme, but those coins are going somewhere right? A fat chunk of this is coming out of Coinbase, and they are institutional sized lots (10k+ BTC), and are most likely going into custody solutions.
Note that this is NOT the case for poor old ETH. Coins are flowing OUT of smart contracts, and INTO exchanges. I suspect the market still has some concerns over DeFi deleveraging, regulations, and potentially just unwinding positions.
I see accumulation continuing for Bitcoin, with Shrimp and Whales providing a relentless bid, and adding to their balance rail hail or shine. The Accumulation Score has been > 0.9 for almost the entirety of June. The closest analogue of this is post March 2020 and Nov-Dec 2018…the literal bottoms.
BTC prices are well and truly insight the ‘value zone’ as measured by all of the bear market floor models that I have on my radar. Only 14-days out of 4,361 (0.3%) of all historu have been below the 0.6 Mayer Multiple, the Realized Price, and the 200 Week MA.
This is very uncommon. Probability does not favour the bears in this instance in my honest opinion. I couple this with a hell of a lot of folks on twitter calling for $10k and even sub-$10k Bitcoin.
Maybe…but we are really talking about a never seen before, all models are broken, nothing works style event here. It COULD happen, but it is unlikely.
Onchain Activity remains lacklustre, but really this has been the case since September 2021. It is only the HODLers that remain, and prices are simply correcting until the sell-side matches their provided demand profile.
The HODLers that do remain however just keep on stacking. Non-zero addresses keeps climbing…
…and illiquid supply just keeps on punching to new highs.
Finally, the downtrend in young coins (< 3 months) on the Realized Cap HODL waves persists. This can only be the case when the majority of the market is HODLing, and accumulating time, rather than destroying it.
What I see in the data, is a normal, run of the mill, classic Bitcoin bear market. I don’t see a freak occurrence. I don’t see a complete loss of faith by the HODLers. I don’t see a deterioration of Bitcoins value proposition, not the opinion of the HODLer class.
I just see prices coming down until a low is formed.
Now that may seem like useless information at face value. But once you accept that nobody knows where the bottom is, and think about it as identifying where a floor is PROBABLE to form, things make a tad more sense.
We are trying to put probabilities in our favour.
This time could be different.
It could also be exactly the same, which is ironically, the most likely outcome. It always feels different at the hard right edge. But the human response rarely is.
But Macro Bro!?
Yes. It is different…but so was March 2020.
The debt is still there.
The government fiscal deficits are still there.
The deflationary forces of demographics, debt and technology remain.
And the Fed cannot print oil.
But they can print USD to pay for the oil. And to fund the government. And to pay entitlements.
The thesis of guaranteed currency debasement has not changed. It is simply a process of time and a wild ride between here and there.
Infinite fiat. 21M Bitcoin.
It is just math.