To explain, the analyst shares a chart comparing the price of BTC and the supply ratio of illiquid coins, or coins that are rarely sold. The illiquid supply shock ratio is a good leading indicator as BTC tends to follow the upticks or the downward moves of the metric, Clemente argues.
“Supply became liquid in late April/May, was a leading indicator of the ensuing price drop.
Supply got locked up in late June/July, this bull div was another leading indicator of the price reversal that followed.”
Supply became liquid in late April/May, was a leading indicator of the ensuing price drop.
Supply got locked up in late June/July, this bull div was another leading indicator of the price reversal that followed. pic.twitter.com/v0BnpcnFfq
According to the analyst both whales (entities with more than 1,000 BTC) and minnows (entities with less than 10 Bitcoin), have been steadily accumulating since Bitcoin crashed over 50% in May of this year.
Clemente has also created a new model using Glassnode’s data, that marks a floor price for Bitcoin.
“Using Glassnode’s illiquid supply data, this model is essentially trying to estimate a floor based on Bitcoin’s real-time scarcity. Although price has indeed dipped below briefly in mid-2017 and earlier this year, it has never stayed below for long and still remains valid as a proxy for an estimated floor in my opinion. Currently, $38,283.”
BTC price came within $1,300 of my bottom model yesterday. Yes, price has gone below before briefly, but never for long.
