Analyze the attitude of BTC holders from the data

1. The "God's Prophecy" circulating in the circle

The picture below is a "God's Prophecy" widely circulated in the currency circle this year. The date of release of this prophecy is April 2019.

It predicts that the bottom of BTC will be on December 15, 2018, and then reach $5,300 in April this year; $9,200 in July; $16,000 in October; $29,000 in February next year; $56,000 in July next year, and $11 next year By then, the total market value of digital currencies will reach 1.5 trillion US dollars, while BTC will only account for 40% to 46% of the total market value.

Judging from the current data, its predictions about the bottom of this bear market, prices in April and July are all accurate predictions, and now we are about to witness whether the price of BTC can reach $16,000 in October.

2. Should investors operate according to this "God's prediction"?

As ordinary investors, what should we think of this "God's Prophecy"?

If some investors really believe in its prediction of the future trend because its predictions so far are accurate, that is, BTC will rise from the current price (as of writing) of $8,200 to $87,000 by the end of next year, then at least If there is a 10-fold increase, it is safe to buy BTC with full leverage and hold it until next year.

Doing so would be gambling, not investing.

We have always opposed this approach. We not only oppose the investment method of guiding one's own behavior based on various news, but also oppose all blind investment operations based on a certain point of view without thinking.

3. The truth revealed by Coinmetrics data

So what is the correct and reasonable approach? It is based on the data and your own analysis to judge the real situation of the market.

Below we quote a data graph intercepted by the "Hot Wheels Community" from the coinmetrics.io website:

The picture above shows the changes in the number of BTC held by the holding addresses of each BTC position price between September 20 and September 29.

The leftmost vertical coordinate in the figure is the ladder price of BTC, and the bottom is the change in the amount of BTC held. The brown histogram shows the decrease in the total number of BTCs held by all addresses at a certain price, and the green histogram shows the increase in the total number of BTCs held by all addresses at a certain price.

September 20th to 29th was the period when BTC fell from $10,000 to $8,000.

During this time period, we found that holders with a holding cost of around $8,000 are increasing their BTC holdings significantly, as shown in the longest green bar chart in the figure; the second largest increase in the size of holdings is held by holdings with a holding cost of around $8,500 , as shown in the shorter green histogram. Together, the two accumulated more than 800,000 BTC.

At the same time, holders with a holding cost of $10,000 are selling BTC sharply, as shown in the longest brown histogram in the figure; holders with a holding cost of $10,500 are second in the selling range, as shown in the second longest bar chart Shown in the brown histogram of . Together, the two dumped nearly 600,000 BTC.

However, those whose holding cost is below $8,000 did not increase their holdings but sold them in a very small amount.

Based on the above data, we believe that:

1) The holders whose holding cost is 10,000 USD and above who sell sharply are very likely to be short-term speculators and those who are not determined, and these people start to panic sell when the BTC price falls to the holding cost;

2) Holders with holding costs around $8,000 will increase their holdings significantly when the BTC price approaches their own holding costs again.

3) A very small number of holders whose position cost is below $8,000 are selling on rallies and taking profits, but the overall position is still firm.

In my article, I have always emphasized that BTC can be invested with confidence within 8,000 US dollars, and those with a strong risk tolerance can also make fixed investments within 10,000 US dollars. In the figure above, the holders with holding costs of $8,000 and $8,500 increased their holdings significantly during the period when BTC fell from $10,000 to $8,000, which coincides with our point of view.

In addition, in the article on September 27, "Smart people are "fixed votes", but fools are "buy bottoms"", once boldly predicted:

"Washing from $10,000 to $6,000, this 40% drop will definitely wipe out a large number of speculators who rushed in and holders who are not firm in BTC, until they have no confidence, until they are completely hopeless, and they will be wiped out. Till they leave this sad place disheartened."

Now BTC has only been washed from $10,000 to $8,000, and this 20% drop has washed away some unsteady holders.

I believe that if the market continues to fall, more unsteady people will be out one after another, and there will also be holders with lower holding costs who sell a small part of their positions to take profits, but still maintain a large number of positions, and at the same time there will be more firm Investors continue to increase their holdings substantially.

Data don't lie. Through this picture, we see what the real firm holders are doing in the process of BTC falling from $10,000 to $8,000, and how the market ruthlessly weeds out speculators and unsettled ones.

Our investment decision-making depends on data, not on "God's prediction".