Last week we concluded that Bitcoin will continue to see a market correction based on our analysis of the daily trading volumes of Bitcoin. Our prediction stood largely correct. Before we move on to this week’s analysis, let us refresh our take on the overall trend of Bitcoin price.
Recently, there is a graph on Bitcoin’s “never look back” (NLB) price. NLB is calculated as follows: For each given date of Bitcoin’s existence, plot the lowest price between that point and today. For instance, taking 19 July 2010 as a start date, the lowest recorded price since then has been $0.05, occurring on 25 July 2010. 10 on the horizontal scale actually refers to day 100, 20 to day 400, and 70 to day 4900 or 28 Dec 2023.
We notice two rules from the graph. Rule number one, the overall rising trend of Bitcoin’s NLB has never changed in the past 10 years. Rule number two, although NLB is hard to accurately predict, there is growing evidence to support rule number on as time goes on.
Take 34–41 on the horizontal scale in the graph for example. The NLB between 31 and 41, which stands for 1160 and 1680 days after July 19, 2010 (that is, September 2013 to February 2015), is US$200. From where we stand now, the chance of the price of Bitcoin returning to US$200 is very slim.
Based on this trend, we predict that the current NLB of Bitcoin is US$3,000. The figure will rise to US$10,000 between March and July 2020, which 36000 days after July 19, 2010. Let us wait and see.
Daily trading volumes- Bitcoin
The daily trading volume last week was 321,000, which was similar to the figure from the week before. The daily trading volume has been on a slow increase since February 2018. It shows the core value of Bitcoin and is the fundamental support for Bitcoin price. Judging from the current tardily trading volume, Bitcoin will continue to see an adjustment.
Daily trading volumes- Ethereum
The affects of Ethereum and Bitcoin on each other are getting stronger in the market. Beginning form this week, we will include the daily trading volume of Ethereum in our analysis. The trading volumes of Ethereum last week averaged at 679,000, an 1.8% increase compared to the figure the week before.
Daily Average Hashrate
The hashrate for Bitcoin was at a high of 104.5EH/s and a low of 88.8EH/s. Computing power (aka mining hashrate) is a key market metric as it illustrates the networks transactional demand. It has been on a steady rise since last year, which lays the foundation for the value of Bitcoin. For mainstream mining rigs, the current price of Bitcoin has not reached the shutdown price yet, which still brings miners a good profit.
Active & New Addresses
Active Addresses refer to the number of unique “from” or “to” addresses used per day. New Addresses refer to the number of addresses used for first-time transaction per day. We saw an 22% decrease in active address. The number of new address remained roughly the same.
USDT remained largely the same. We haven’t see much change in transaction volumes.
Fear & Greed Index (FGI)
FGI is at 37, meaning that the market continues to show fear sentiments.
FGI looks at six different factors to score investor sentiment on a scale of zero to 100 — extreme fear to extreme greed respectively: market volatility (25%) + market momentum (25%) + social media trend (15%) + market survey (15%) + the ratio of Bitcoin in the market (10%) + Google Trend (10%).
Long/Short Position Ratio
The long/short position ratio is at 1.21, a relatively balanced figure.
Having a “long” position in security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future. The opposite of a “long” position is a “short” position. A “short” position is generally the sale of a stock you do not own. Investors who sell short believe the price of the stock will decrease in value. In the market of contracts, the total positions of long and short are equal. For each long position, there is a short position. If the long/short position ratio is high, then it means that there are fewer people who go long than those go short. According to our experience, if the ratio is too high it is highly likely that we will see PBX or stocks nosedive.
Overall, all the fundamental indexes show a stable trend. They have not gotten better or worse. We predict that the market will see a slight adjustment.
The price of Bitcoin was at US$8,190 at the time of writing.
Our Take on Bitcoin’s Never Look Back Price, Bitcoin Price Analysis was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.