In 2020, Bitcoin has risen from the lowest point of 312 plummeting 3,338 U.S. dollars and exceeded 24,000 U.S. dollars. For investors, such a huge increase can become a rapid asset growth as long as they seize the opportunity and maintain an optimistic idea of holding currency Great opportunity.
Right now, Bitcoin has a trend of breaking through higher barriers upwards. In the upcoming 2021, how do investors predict Bitcoin? What data can be used to analyze trends? The data mining and analysis article brand “Golden Digital Reading” under Golden Finance lists 10 sets of data for you, which may become your data support for judging the trend of Bitcoin in 2021. The data in this article comes from specially invited data partners .
1. OTC funds are increasing rapidly
Over-the-counter funds for Bitcoin transactions are increasing violently. As shown in Figure 1 below, throughout 2020, USDT has been issued multiple times, and the cumulative amount of additional issuance has exceeded 500%, from about 4 billion to 20 billion. According to the analysis in Figure 2, It can be seen that USDT funds account for nearly 70% of Bitcoin transaction volume.
Figure 1: Correlation between BTC price and USD market value
Figure 2: Statistics of inflow and outflow of BTC funds
2. Bitcoin circulation continues to decrease
At present, the circulation of Bitcoin has shown a significant decrease due to the lock-up. As of the date of publication, the gray-scale lock-up has exceeded 570,000 Bitcoins, while in the DeFi application, more than 220,000 Bitcoins have been locked.
According to Bitcoin’s block production rate, the annual output of Bitcoin is about 328,500. The amount of lock-up for grayscale and DeFi applications is about 3 times the annual output of Bitcoin. According to public forecasts, under the premise of market stability , Grayscale holdings and DeFi application lockups may continue to increase.
Figure 3: The total lock-up volume of BTC-anchored coins in DeFi applications
Figure 4: Trend of gray BTC lockup volume
3. Significant increase in scarcity
Scarcity is a diffraction indicator of Bitcoin circulation. According to the estimation model of Stock to Flow Ratio, the current Bitcoin scarcity index is 56 (referring to the current annual production rate of Bitcoin, it will take 56 years to produce all current circulation Bitcoin), and the Bitcoin scarcity index before the halving in May 2020 is: 25.6. And the data shows that the top 100 addresses currently hold 14% of all bitcoins.
The sharp increase in the scarcity index can be compared with the data that the scarcity of gold is 62. According to the scarcity valuation, the current Bitcoin value is 98,842 dollars, while the current Bitcoin price has only exceeded 24,000 dollars. In addition, due to the impact of the halving, Bitcoin’s inflation rate has also decreased from 3.5% at the beginning of the year to the current 1.74%. The next block reward halving is expected in February 2024.
Figure 5: Correlation between BTC price and its inflation rate and S2F scarcity
Figure 6: BTC total circulation and inflation rate trend
4. The cost of acquiring bitcoin across the network is increasing
The acquisition cost and exit expectations of institutions are important basis for determining the increase. According to statistics, the average holding cost of Grayscale is 11,100 U.S. dollars, and the current average Bitcoin holding cost of the entire network is: 8067 U.S. dollars. Judgment basis: Bitcoin has achieved market value Is 150 billion U.S. dollars, and the market value of Bitcoin is 360 billion U.S. dollars.
[Note: Realized Cap (Realized Cap) An indicator created by Coin Metrics is the market value calculated by adding up the market price of the last Bitcoin move on the chain. This indicator reflects the average holding cost of the entire network, the higher the realized market value, the higher the turnover rate of the entire network, and the higher the average holding cost]
Figure 7: Correlation between BTC price and realized market value
Figure 8: List of Grayscale Cryptocurrency Positions
5. The bull-bear cycle is obvious and it is currently in the early stage of the fourth round of bull market
Moving with the cycle is the most ideal state for investing in cryptocurrencies. As shown in the figure, we are in the fourth round of bull-bear cycle. According to K-line indicators, this cycle is still worth looking forward to.
In the first round of the bull-bear cycle, Bitcoin rose by 10333 times and then retreated 92.9%. The second round of the bull-bear cycle rose 530 times and then retreated 86%. In the third round of the bull-bear cycle, it rose 100 times and then retreated 86.9%. We are in the fourth round of the bull-bear cycle price increase trend, the highest point of increase and retracement points are still unpredictable, so it is worth looking forward to.
Figure 9: Bull and bear analysis of BTC halving cycles
6. The agency predicts that the target price of Bitcoin is 91919.96$
According to the bull-bear cycle announced by the well-known crypto market data company (Brave New Coin), this round is in the middle of the bull market. The target price of Bitcoin for this cycle is 91919.96$. As shown in the figure above, the light green indicates the area suitable for buying coins. Light red is suitable for selling areas, and gray is suitable for holding fixed areas.
Interestingly, the institution’s Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX) have been added by Nasdaq to its comprehensive data source-Nasdaq Global Index Data Service SM (GIDS).
Figure 10: BTC Brave Brand indicator model
7. Bitcoin bull market is bound to drive bull markets in other sectors
Bitcoin is the largest trading entity of cryptocurrency, and its price linkage will inevitably drive other token markets. In 2020, the price of Bitcoin has risen, and the market share of Bitcoin transactions has recovered from the lowest point of 36.7% in 2018 to 66.2%. But this has reduced the market share of non-mainstream cottages from the highest point of 11.7% in 2018 to the current 7.37%.
According to the cyclical trend from 2018 to September 2019 to October 2020, after the bull market of Bitcoin, it will inevitably be a bright moment for non-mainstream copycats.
Figure 11: Correlation between BTC market share and altcoin market share
8. Long-term holders of more than one year are changing hands
According to the data analysis on the Bitcoin chain, the number of coins held by addresses that have held coins for more than one year shows obvious periodicity. When the number of coins held by addresses decreases, it will inevitably bring about a wave of price increases and form a price peak. At present, It is at the beginning of the cycle when prices are rising and the number of bitcoins held (more than one year) is declining.
Figure 12: The status of holding BTC addresses that have not changed for more than 1 year
9. Bitcoin price has the strongest correlation with miners’ income
The indicators of the Bitcoin network are judging factors in addition to the trading market indicators. The figure below shows the correlation between the common indicators on the Bitcoin chain and the price of Bitcoin. As shown in the figure, the difficulty of mining has a significant negative correlation with the price of Bitcoin. . The price of Bitcoin is strongly positively correlated with the income of miners. For example, the better the income of miners, the higher the price of Bitcoin. More relevance can be seen in the figure below.
Figure 13: Correlation between BTC price and different chain indicators
10. Participating companies are increasing
Finally, the number of participating companies in the blockchain industry is increasing. As can be seen from the above figure, the number of companies in business and in existence has increased sharply over time, and only in 2020 will increase by more than 50%. As of the date of publication, the cumulative number is: 33604, 99326 survived.
[Note: Blockchain companies indicate that their business scope includes blockchain companies. As the company’s business scope may be adjusted, past data may change. For example: Company A was established in 2009 and was in its business scope in 2012 If a blockchain is added, then company A should be included in the blockchain company established in 2009; if company A adjusts its business scope again in 2015 and deletes the blockchain, then it should be a blockchain company established in 2009 Deleted from]
Figure 14: Time distribution of establishment of Chinese blockchain companies
Summary
Bitcoin has become a relatively mature investment target. Comprehensive financial indicators are an inevitable element for judging trends, and other relevant data will also become the appearance of hidden factors. At present, it is speculated from the cycle background and data that in 2021, Bitcoin has higher price expectations. In the absence of a market black swan event, the high point and retracement ratio of the fourth round of the cycle require investors to pay more attention Number.
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