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Golden Observation | BTC has not peaked yet this year?



Although BTC has achieved an increase of more than 550% this year, according to the data on the chain, there is still a large increase. What is the reason behind it? It can be summed up in one word: Coin Days Destroyed

BTC has not yet peaked this year

Based on the current currency price, we can get an intuitive feeling about the confidence of long-term BTC holders by analyzing the burning of currency days.

The following sections will introduce Coinday Burn and its functions.

What is Bitday?

Coin days are the number of days for BTC to be transferred from one wallet to another. The logic behind Bitday is to obtain higher value by selling long-term holding tokens. Why do you do this? Because long-term BTC holders have a deeper understanding of market cycle fluctuations, they are better at judging the best time to buy or sell.

Jinse Finance Market Report 丨 BTC pulls back slightly and short-term volatility expands: According to the Huobi market, BTC started to pull back this morning, and the local market fell below 11,000 USDT, and continued to fluctuate around the range. The large deviation value of the daily chart has begun to be corrected, and the overall rhythm of bottom to bottom is maintained, and a rising wedge may be formed. The 4-hour chart fell below the moving average MA10, and the moving average MA5 constituted a suppression. The market volatility in the 1-hour chart expanded, and continued to fluctuate around 11,000 USDT. As of 18:30, the specific performance of mainstream currencies is as follows: [2020/7/30]

Therefore, when long-term coin holders sell BTC, the coin-day burn value will surge to a higher level. When these currency holders firmly hold their positions, the number of currency days destroyed will decrease, indicating full confidence in a new round of bull market.

What is Coinday Burn?

Golden Morning News | Overview of important overnight news on February 29: 21:00-7:00 Keywords: , UK, Bitfinex, Fcoin, United States

1. Deputy Governor of the Bank of England: Libra may become systemically important;

2. Bitfinex claims to have repaid another $100 million loan to Tether;

3. Zhang Jian, founder of Fcoin: is working hard to cooperate with the social committee to promote the restart, and the website is expected to be restored within a week;

4. The District Court of Australia allows cryptocurrency trading accounts as security for legal costs;

5. Bitcoin Expert: Bitcoin and Ethereum represent a trade-off between security and flexibility;

6. BitMEX Research: Bitcoin has stale blocks at height 619141

7. U.S. law enforcement agencies deploy "CIP" to homeland security investigations involving encryption;

8. BTC is now at $8,738, an intraday increase of 0.26%, and its current market value is $156.451 billion. [2020/2/29]

Coinday burn is a term that refers to the sudden sale of BTC that has been sitting in a wallet, resulting in the destruction of coindays. Importantly, these BTCs were not actually destroyed. Coin days burn is simply a measure of the number of days a token was held before it was sold.

Analysis | Golden disk: TUSD/BTC short-term rebound blocked: Golden disk analysts said: TUSD/BTC is bound to the US dollar, theoretically forms a reverse fluctuation with BTC, in the short-term, after a wave of rebounds, it fell below the moving average, and the MACD green column shortened , there is an adjustment demand, and BTC may go in the opposite direction. [2018/8/6]

For example, suppose an investor buys 1 BTC and keeps it in the wallet for 90 days, and then sees the price rises sharply and decides to sell it, which means destroying 90 coin days.

If investors continue to hoard coins and only sell a small part of the previous tokens, the number of coin days destroyed will show a downward trend. In the later stage of a bull market, people usually sell more and more tokens, which will lead to an increase in the number of coin days burned.

The beauty of this value is that it has less impact on short-term traders. Compared to the activity of long-term traders, since these traders do not hold BTC for a long time, they will have the smallest impact on the number of coins burned.

However, when long-term holders start to sell BTC, you want to pay attention to this trend.

Judging by these important indicators, it seems that BTC is far from peaking. BTC is currently priced over $40,000, but the 90-day moving average of coin-day burns is near its lowest level, as shown in the chart below:

The number of currency days destroyed gradually decreased. Compared with when the currency price rose, the confidence of long-term currency holders is now stronger.

How to calculate the number of coin days burned?

The calculation of the number of currency days destroyed involves the following two elements:

1. First of all, you need to know the amount of BTC in a transaction.

2. Multiply the amount by the BTC holding date.

Once the transaction is completed, a certain number of currency days will be destroyed, which also means that the longer the token is held, the more currency days will be destroyed.

The chart below shows the balance of power between long-term holders and short-term speculators.

Currently, coin-days burned are far lower than the 2017 peak, so this means that there are fewer long-term holders selling BTC than in previous bull cycles.

It has been 12 years since the birth of the BTC network. Compared with the past, the current BTC has appreciated in value, which shows that long-term holders will not sell their assets. There is still a lot of room for BTC prices to peak.

In addition, for long-term currency holders, institutional investors have recently generated higher demand for BTC, which has increased the long-term confidence of currency holders.

In April this year, for institutional clients, Fidelity Investments, which manages $10.3 trillion in assets, launched the Sherlock analysis platform to provide on-chain BTC data visualization services. Wells Fargo is also preparing to invest in BTC, announcing that it will offer an actively managed cryptocurrency product.

The actions of these well-known asset management companies show the future growth potential of BTC, and also prove that institutional investors are very fond of BTC.

The content-zce of this article comes from BitcoinMagazine


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