Dear subscribers,

Welcome to The Bitcoin Forecast #39.

In the last letter  10 days ago the expectation was bullish. Since then the price has moved up from $61.1k rallying as high as $69.0k before consolidating. While there has not been much on-chain activity of late, this letter is an interim update while we wait.

Top level summary for 15th Nov 2021 (current price $64.3k):

Macro: Accumulation from long term holders are at peak levels, it’s a bullish structure for the months ahead. Meanwhile the selling habits of experienced investors tell us the bull market is in mid-flight.

Short term: Investors are in a very quiet spell. HODLers are steady while speculative swing investors have been mildly buying.

Ethereum Notes: On-chain fundamentals continue to strengthen ahead of price. ETHBTC fundamentals are showing bullishness.

BTC price action expectation: Continued sideways consolidation for a while longer, maybe up to 2 weeks, before the overall bullish macro environment takes hold.

Price action conviction: Medium to low. There’s not much signal coming from on-chain analysis presently.

All the best until the next letter.

-W

=======================
Where to buy BTC…my FTX referral >   link
It’s that part of the cycle again where I’m being asked where’s the best place to buy BTC…I use FTX due to their low fees and excellent liquidity. For limit orders the fee will be 0.02% or less, even as low as a 0.03% rebate (i.e. you get paid when your order fills).

Previous report > LINK



Analysis Breakdown

Macro: long term accumulation has peaked


Little has changed in the macro picture. Long Term Holders Supply Shock remains at peak levels of accumulation providing a great setup for bullishness in the months ahead. There has been a small amount of selling, whether this trend continues or abates will give us an idea of how long the current bullish environment will last for.

Macro: The selling habits of experienced investors tell us the bull market is in mid-flight

We can look into investor activity with many qualitative lenses. One view that’s useful is to look at coins being sold by experienced investors. The chart below is a new one I’ve been working on that does just that. 

This chart measures coins being sold into the market that carry more age, a term we analysts like to call “destruction” (coins that have aged in wallets for a long time before being sold indicate an experienced investor is selling).

Market tops are signaled by peak selling by these experienced investors, similarly market bottoms are signaled when their selling is at a minimum.

Presently this oscillator is in mid-flight, indicating there’s still lots of room left in this bull market, and likely months before hitting the red zone gauging from past trends.

Our heatmap view below shows this how settled the on-chain activity has been. There’s very little change in movements of coins from HODLer during the last week.

Our heatmap view below shows this how settled the on-chain activity has been. There’s very little change in movements of coins from HODLer during the last week.

And again, the chart below shows the net flows of coins to and from exchanges are very neutral.

ETH Commentary

Ethereum on-chain fundamentals continue to strengthen while price has not yet fully reflected this strength.


Comparing BTC’s Supply Shock to ETH shows us a ETHBTC bullish divergence. Namely ETHBTC fundamentals are climbing while price has been declining. In my view, a breakout of ETHBTC’s longstanding resistance channel is imminent.