Bitcoin (BTC) is still at the ‘lowest point’ of a 2021 bubble, new data tracking miner and investor behavior indicate.
In the latest signal that the price action of BTC still has great growth potential, the researcher Geert Jan Cap said shown bullish signs coming from Bitcoin’s thermocap.
Thermocap suggests that Bitcoin just start
Thermocap is a measure aimed at tracking Bitcoin price cycles based on actions taken by miners and investors in buying and selling BTC.
It uses the so-called thermocap multiple, which divides the Bitcoin price on a given day by the cumulative block subsidy, or all the rewards that miners earn from day one.
The resulting value provides insight into how profitable it is to sell at a given price point, and why the volatility may arise at different times in the history of Bitcoin.
‘It shows when a bubble was present in the price with a very high signal-to-noise ratio’, explains an introduction to the statistics and adds that thermocouple also ‘makes the comparison of the bubble peaks possible’ and ‘apparently’ a relatively constant value of the multiple for ‘healthy’ price levels’, among others.
As of January 17, 2021, Bitcoin’s thermocouple multiple stood at 17.5, up from a recent high of 20 earlier in the month.
Since bubble activities historically occur between 16 and 60, it is immediately clear that Bitcoin still has plenty of room to explore this bull cycle.
“We are still at the bottom of the 21-bubble phase,” Cap summed up in Twitter’s comments.
Weak hand sales define BTC bear markets
In terms of the way stimulus events cause and respond, statistician Willy Woo believes that a cycle of weak hands sold during each bear market over the life of Bitcoin is a provable phenomenon that takes precedence over changing narratives.
On Sunday, Woo highlighted Bitcoin’s realized price – US dollars stored in the network – was higher than the spot price during the bottom, both in late 2018 and March 2020. In the earlier case, BTC / USD fell by 85% compared to its previous price near $ 20,000 .
“Weak hands (buyers who buy under FOMO) always capitulate that thoughtful buyers with strong hands can get bargains,” he said.
“It happens in EVERY carrier cycle.”
The remarks are particularly timely, given recent market trends, as Bitcoin rose to $ 42,000, was sold to $ 30,000 and then reached $ 40,000 again, all within a week.
As Cointelegraph reported, data highlighted that small-balance wallets are declining, while the number of wallets with a balance of 1,000 BTC or more has grown. Analysts have warned that bitcoins are being transferred from small investors to whales and are urging sellers not to share their funds during such volatile conditions.
“The story for each bear and bull market changes cycle after cycle, but the effective mechanism is the same,” Woo concluded.
‘I read few values to read market news and narratives in the industry. The IMO is better at tracking capital flows in the behavior of participants. ‘