Bitcoin Value Indicator: Jan. 1, 2019

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f this is your first time reading a Bitcoin Value Indicator report, you might want to read the first article in the series, published back in July, to get caught up. There have been a few changes since the report was first created, such as the switch from using the Bitcoin (BTC-USD)(OTCQX:GBTC)(COIN) market cap to the price. If you would like to dig deeper into the statistical relationships between the network data and the Bitcoin price, check out this article, where my unconventional approach is validated using Spearman’s Rho.

Signal Breakdown

This time I want to start with the result and then work backwards. See below.

Indicator Name Unique Addresses Hash Power Total Transactions
Predicted Price $1,543 $5,153 $4,076
Actual / Predicted 2.41x 0.72x 0.91x
Metric Signal Overbought Oversold Oversold

Source: Bitcoin Value Indicator tables and blockchain.com

bitcoin value indicator chart january 2019Source: blockchain.com and author’s new charts

January 2019 Signal

If the Bitcoin price is below all three prediction metrics, then we have a situation that historically results in strong price performance of the coming months or even years. When the price is above all three prediction metrics, that has historically been a sign that the price could be nearing a correction phase. The rest of the time, the price is below at least one prediction metric and above at least one other. In that state, the near-term movements are less clear. This is the position we are in right now, which I call “it’s complicated.”

Original story by: https://seekingalpha.com/article/4231117-bitcoin-value-indicator-jan-1-2019

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