BTC Important Charts - Make Sure To Be Prepared

By SirK133 | CryptoCat | 13 May 2021


The cat got chased hard by the market today, as probably many of you, but still dragged a chart in. Even two to be precise, makro charts that you should watch to know whether you should also run or not. They don't tell the whole story (does anything?) but help to judge the real impact of recent FUD on market behavior. 

Firs one is inflow/outflow metrics of exchanges. There are many forms of visualizing this data, for today I choose the one belowe due to a clear message, but for further tracking keep in mind outflows from exchanges (not included here) are as much important. So let's have a look:

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I believe the current dip is caused by external influence not really depicted in data - news about Binance being investigated by IRS and DOJ (its nothing official yet!) and Tesla not accepting BTC as a payment any more (don't know why market cares but it does). Might be even more FUD I missed. BTW Exit, one of Europe’s biggest music festivals, has started accepting Bitcoin payments for tickets and Microstrategy bought another $15 million BTC, but nope, unverified rumor and car payment options still move the market down. But I'm getting sidetracked - sorry, cats have their own ways. Back to the chart.

I hope you noticed, that until inflows substantially cease, price is not getting out of the dip - something to keep an eye on for the near future. Only a week a go it looked pretty bullish, inflows were at quite low levels, I believe if they stayed there we would have seen a more pronounced price rise. But when I saw inflows picking up and the price moving more or less sideways I was aware we are in a fragile state - still the barrage of bad news was hard to predict but it's always useful to know if the market is solid or not at the moments like this. Right now I believe it's those emotions driving the inflows and price, not the other way around, so how I mentioned, I will consider buying the dip when I will notice BTC moving from exchanges again and inflows getting smaller - a sign that emotions died down and the belief returns to the hearts of BTC holders. If that gets me in too late then so be it, better this way than trying to catch a falling knife blindly.

But there is another chart I look at daily - I was meaning to write a longer post about it and I still might, but it's too relevant right now to omit. It's miners behavior chart. It's basically the same chart, but takes into account only miners inflows/outflows.

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Why is this important you might ask? Well because of two things. It's a big money that lives of BTC - miners' income comes from the cryptocurrencies they mine, so they put themselves in danger by not selling them, while incurring the cost of running their business. If I would to follow someone in my crypto investing, I prefer someone who has as much skin in the game as possible and you don't get more of that than with miners. The other thing is that they move big quantities that influence the market. The reason I bring this up now is because miners exhibit unusual behavior for last 2 months - accumulation.


Now there are two sides of this coin. One is, that as long they hold you should feel OK hodling too, since they probably know what they are doing - that's the common knowledge. The other side is, when they get tired of this accumulation, for example if the price still fails to break previous ATH despite them holding back on spending BTC, this might open the food gates on BTC supply driving the major dip. That's why I check this daily - massive selling by miners has a potential to push the market down big time and the electricity bills won't pay themselves. It's not like Armageddon is bound to happen, but I expect miners releasing their supply will be a bearish factor somewhere down the line and I want to know when it comes.

I love current situation as much as my cat loves water, so let's hodl on tight together,
CryptoCat

All tips go to cat treats and catnip 😻
This is not a financial advice – I’m no financial adviser, nor is this a legal advice – although I’m a lawyer. This is no advice at all, seriously, don’t take advice from random cats – the Internet is full of them! DYOR!
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SirK133
SirK133

Lawyer, analyst, crypto enthusiast, gamer, poet. I am interested in everything that makes up our world and how it is related.


CryptoCat
CryptoCat

My cat so often stomps the keyboard while I do my crypto research, I might as well make him a co-host here.

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