It is close to Bitcoin halving, and there are many articles on various topics related to halving the market. However, there are not many valuable articles, but today I saw an article about top evasion and bottom hunting worthy of sharing with you.
In fact, these several indicators have been discussed in many articles before, but rarely have such a comprehensive summary. Today, I will analyze and introduce with you some of the major indicators of escaping the top and bottoming.
1) Number of Bitcoin active addresses and Bitcoin price
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The so-called Bitcoin active address refers to the address where transactions have occurred within three to six months. An address with transactions within 6 months indicates that this address is used by someone.
If an address has not been traded for a year or more, then the holder of the address may have basically left Bitcoin.
An address was used to indicate that he either bought or sold, no matter what kind of behavior will have a direct impact on the price of Bitcoin.
Under the same conditions, the greater the number of active Bitcoin addresses, the more people participate in Bitcoin transactions, and therefore the greater the impact on the price of Bitcoin.
However, simply looking at the number of Bitcoin active addresses is not significant, because if there are many active people, but all are small transactions, it is difficult to affect the price, so we must also consider the price of Bitcoin.
I tend to divide the price of Bitcoin by the number of active addresses. When the ratio is getting higher and higher, it means that the price has increased too much, and there is a possibility of a callback. When the ratio is getting lower and lower, it means that the price may be close to the bottom .
So where do you find these two pieces of information? We can check the price on www.coinmarketcap.com ;
The number of Bitcoin's active addresses can be viewed at https://bitinfocharts.com/en/comparison/activeaddresses-btc-eth-xrp-ltc-bch-zec-dash-bsv.html#log .
2) 60-day cumulative increase
This refers to the cumulative increase in Bitcoin over the last 60 days. If this increase is too high, it means that Bitcoin's increase is too fast, and there is a need for a callback. If this decrease is too large, it means that Bitcoin may be close to the bottom and usher in a rebound .
For this indicator, I don't think it's necessary to look at it too mechanically. You can choose a cumulative number of days based on your own experience. I think 30 days is enough.
3) Mining machine price
This is a very direct indicator. Because the price of bitcoin will skyrocket as soon as the market comes, new and old miners will do everything they can to purchase mining machines. If the price of the mining machine is too high, it means that the price of bitcoin is too high. ;
In turn, when the price of the mining machine fell to a decent level, it became a waste iron sold in pounds, which indicates that the price of bitcoin has been lower than the operating cost of small and medium-sized miners and even large miners, forcing them to no longer continue to operate Had to sell machines to leave the industry. At this time, even if the price of Bitcoin is not too low, it is still worth buying .
Of these three indicators, I think the first and third indicators are the most useful. Because these two indicators are unlikely to be manipulated by humans, they basically reflect the true operating status of the Bitcoin system.
In fact, in addition to these indicators, we have more or less accumulated our own experience in normal operations, and explored our own set of evaluation standards. But if these three indicators are added to our own evaluation system, it will definitely increase our investment win rate. And such a rating system is a very good tool for long-term investors. (Author Lao Dao, Dao said the blockchain)