First, let’s review the BTC: RHODL indicator that we highlighted in the previous monthly report (October 18, 2024). This indicator is the ratio of “the number of BTC held on the chain for 1 week” to “the number of BTC held on the chain for 1-2 years”, which is used to reflect the volatility of short-term chips relative to the performance of long-term chips.


Historically, before and after the halving, the RHODL indicator will experience long-term fluctuations, and the coin price will also be sideways in the same period. The previous monthly report mentioned that the indicator and the coin price have been sideways for nearly 8 months, and it is possible to break through at any time. The latest situation of this indicator is shown in the figure below👇

It can be seen that shortly after the last monthly report, the RHODL indicator successfully broke upward, and the price of the currency also rose strongly to a high of nearly $100,000.

Next, we will look at the final stage of the bull market in terms of time and space.

First, let’s look at the time dimension. The above figure is also one of the core on-chain data. The upper indicator in the figure is the BTC price, and the lower indicator is the percentage of BTC held by long-term holders on the chain as a percentage of the total BTC circulation. Historically, in the bull market cycle (15-17 years, 19-21 years), this indicator will have two large cycles of decline, and rebound in the connection section between the two waves of decline.

The principle is also easy to understand: in the early stage of the bull market after the end of the bear market, long-term coin holders took advantage of the rebound in the coin price to unwind their positions on a large scale or even sell their chips at a loss, causing the first wave of decline in the indicator; then as the coin price entered a long sideways adjustment in the middle of the bull market, long-term coin holders lay dormant and as time passed, more and more coins became long-term chips, causing the indicator to rebound; after a long adjustment, the coin price continued to charge to new highs, and the market entered the second half of the bull market. Long-term coin holders also continued to sell for profit as the coin price continued to rise, causing the second wave of decline in the indicator

At present, the indicator has already entered the second wave of the big cycle decline. If the current decline is based on 2016-2017 and 20-21, then the next bull market may only have 4-7 months left.

Next, we will look forward to the spatial dimension of the last leg of the bull market.

The indicator in the figure is BTC: MVRV, which is the "(current market price)/(purchase price)" of all BTC on the chain, reflecting the average rate of return of all investors

Then, we use the y = a + b * e^(c * x) function to fit the historical peak of the MVRV indicator (the red arrow in the figure). Based on the fitting function, we speculate that the MVRV of this bull market may reach a height of 3.5.

Finally, according to the upper limit fitting function & lower limit fitting function, the 0-100 oscillation indicator is added to divide the coin price from the bottom to the top into 6 stages. The current score of this indicator is 71, which is in the excitement range (only looking at today's data, the indicator reaches 100, and the coin price reaches at least 133,000)

Finally, we would like to mention that most of the above analysis is based on a larger cycle, and to complete the bull market escape requires more stringent tactical execution

With this goal in mind, we spent a lot of effort to develop a variety of bull-top pricing indicators, and finally selected seven bull-top pricing indicators after multiple rounds of iterative improvements (as shown in the figure above). Considering the maintenance of the indicator Alpha, please understand that the specific formula is not yet public.

In addition, a bar chart showing the number of price breaks through the top pricing indicator is added. It can be seen intuitively that historically, Bitcoin always breaks through 5 or even 6 lines in a short period of time before reaching the top.

The tactical inspiration this brings to us is that in the future bull market, we can refer to this bar chart and escape the top in batches as the price of the currency continues to break through the bull top pricing indicator. The more breakthroughs there are, the more positions will be cleared.

It is worth mentioning that the price of the top coin in 2013 and 2017 broke through 6 lines, and the price of the top coin in 2021 broke through 5 lines. If we conservatively estimate that this round of top coin will only break through 4 lines, and the current price of the 4th line is 145,000 US dollars, then this round of top coin may at least break through 145,000 US dollars.


Summarize

  • The long mid-term volatility of the bull market will eventually end and usher in a new chapter, just like previous cycles

  • The final leg of the bull market is roughly predictable in terms of time and space (except for black swan events)

  • It is unlikely to escape at the peak of a bull market, but it is highly likely to get rich returns at the end of the bull market (no FOMO)



    ——Written on Saturday, November 30, 2024