Bitcoin Macro Price Projections (Cont.)

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BEAM:

Is a simple indicator based on price data alone (roughly speaking, it is the ‘price of bitcoin at any given moment divided by a moving average of past prices’). A green buy zone occurs once a BEAM value reaches 0.07 and lower and indicates a good time to buy. A gray hold zone indicates when one should remain from buying or selling, regardless of BEAM value — this occurs for 8 months before and after each halving. A red sell zone occurs when a BEAM value is of 0.96 and higher, and indicates when there is a good selling opportunity. The grey hodl zone is very important, because without it (for example, in April 2013), one would have sold after the price dip that triggered high BEAM values, and misrepresented consolidation for a bubble pop (and missed out on half of the bull market, and huge gains).  ​

As you can see at the end of the chart above, we have now entered a new hodl zone, with the third halving upcoming in May 2020. Because the price (and BEAM Value) has been dropping while within the grey zone, but not below 0.07, this is great evidence of re-accumulation. There were re-accumulation phases at each start of the hodl zones in the past when price dropped again after a peak. The green buy zones are initial accumulation phases. Reaccumulation usually provides a second chance for late comers to buy at somewhat higher prices. This is good evidence that we are beginning to enter a bull market.

Here is a chart of BEAM Values extended to today’s date (although only beginning from Jan 2013, without price or grey zone overlaid). This too supports the reaccumulation theory, as we are once again so near BEAM Values of 0.07.

RVT: 

Realized Value to Transaction Volume ratio.  RVT Ratios are basically a Price to Earnings Ratio (PE Ratio) for Bitcoin, as it compares the value flowing through the network to the relevant valuation. An RVT of 10 would mean every 10 days, Bitcoin transacts its entire realized cap in value. That is why high ratios are a bearish indicator (Demonstrates decreasing relative demand due to overvaluation and/or low/decreasing transaction volume). Low ratios are a bullish indicator (Demonstrates increasing relative demand due to undervaluation and/or high/increasing transaction volume). Note: As more transactions move off-chain (exchanges, lightning, sidechains), what is considered a low RVT value will trend higher. During sustainable bull markets, the value flowing through the blockchain increases as market participants also increases. This results in sideways RVT Ratio movement.   

Historically, RVT90DMA has broken below a value of 10 at the start of a bull market, maintained these values until the early bear market, and then shot above due to decreasing relative demand.  

In the chart above, please disregard the NVT Value.

Extending the RVT90DMA value to today, you can see that it has once again fallen, indicating another bull market.  ​  

While it has not returned to <10 (it reached 12 and rose up to 15), as I mentioned above, as more bitcoin move off-chain, the values indicating bull markets will have to be adjusted. To me, this seems very close, especially seeing how much exchange volume has grown compared to on-chain volume (please see the next chart).

You can see from the above graph, that starting January 2019, exchange volume actually started to exceed on-chain transfer value!  

In addition, Bitcoin’s first sidechain, liquid, went live on October 2018, taking even more volume off the mainchain. Taking these factors together, I believe gives strong evidence that RVT demonstrates we have entered a bull market.

2YearMA: 

2yrMA is used as the buying line, and 5(2yrMA) is used as the selling line. Buying when Bitcoin drops below the buying line, and selling when it exceeds the selling line, has historically generated large profits. As you can see on the zoomed in graph next, we have barely just dropped the 2yrMA once again. This seems to support the reaccumulation theory supported before.

What if, rather than this recent market drop being a reaccumulation, it is the worst possible situation? A failed bull run, and a continued bear market? Let’s see if evidence points to that being a market top around July 2019.