The latest draft of the infrastructure bill includes raising 30 billion dollars a year from cracking down on crypto tax evasion. Crypto traders may have something else on their minds. The major coins getting slammed heading into the holiday weekend, given how bitcoin is traded when the stock markets are closed. It was a great situation where i don’t have to be exactly right, because it’s a moving target. I can keep adjusting it because it’s just a model.
It was like you ran all the permabills were going bearish, bearish bearish. This is a funny thing: hey, because this thing was going sideways downish for two months and um structurally. You know if you look at the fundamentals on chain. It was really a long-running accumulation.
Bottom um. Yet sometimes it doesn’t happen very often, but sometimes price doesn’t reflect um what’s fundamentally happening happening so like it just went grinding down, so everyone was fooled by price action. I remember peter bran was actually he was quite bearish too, and you know he master technical trader for for decades and he said um in one tweet. This is going to be a real test between um on chain, which is kind of new and technical analysis, because all the tentacles were horrible. You know i looked at the tyrannicals and they looked.
You know just from the price action. It was like scary, um, but yeah. It was very much an accumulation. Um we’ve had two months of flows moving um, not only off the exchange. You could see it, but not as strong more that the coins were moving to long-term investors and they were mopping.
It up and we had mega mega amounts of little guys, um by the gazillions, very unprecedented number of small people, stacking um, and i think they were the ones that were registering as long-term holders. Because you know when, when people come in and buy – and they don’t register a step, they sell or coins leaving their wallet, um they’re immediately considered a what glass note called a liquid. Essentially a buyer and the history is just of buying. So we saw a lot of the stacking um and i’ve started. I’Ve got some new charts, actually that i’ll, probably publish a little bit later, showing just these little guys stacking and they really tell a story of the bull market.
So yeah structurally we’ve been in a bull market a little long, even though price has been so far down – and i was like you know, there’s one of the few circumstances where the market is not only wrong but um ridiculously wrong, like the price really um. The fundamentals right now are no different from when we’re in 50, 60 000 um. So the price has been, i think, just artificially forced down by bearish traders, when we had that massive plummet on the Elon Musk and the china flood. A lot of you know, a lot of coins that were being sold off by wales ended up on exchanges so yeah. I read that as uh the speculation um kind of players, the speculative coins um went up, so traders had a lot of ammo.
You know they had a lot of those coins. They immediately absorbed it because they ended up on exchanges and it’s been two months of them: selling down um and those coins being mopped up, and you know last week so the end of that so um, no more coins uh well, the supply is running short on On on the exchanges, so um price squeezed uh – it’s very very seldom! You see this at that. Well, i’ve never seen one at that scale before in the 12-year on-chain history of bitcoin, we had one um october last year, um and that resolved in a squeeze right. It squeezed from 10 000 to 60 And so the supply shock now is at the same level as where we were when we were range bound in the 50, 60 000.
So um. All we need is really um the the the sentiment of um traders, who really determine the short term pricing of bitcoin to switch bullish to the same level of bullish. Fomo that you saw um. You know pre-may april first quarter type zone where they they started to price a premium um into bitcoin. Above you know the fundamentals: normally you see the price above the fundamentals um, you know in a bull market and then it gets even more.
You know frothy towards the end as when it just gets out of hand, and it’s way above what you know. The long-term guys are supporting the price at so once that flips um the price um, the current supply shot. We deserve to be in the 50. 60. 000 range um once we break 42, i mean that’s the long term sort of line in the sand of the channel we’ve been playing at um, and it’s just really just a big gap from there to 50, 40 42 to 50 is just a gap.
So if we break 42 um, it’s not going to be much time to get to 50 I think we’ll take a little bit more time to um slice through, like i wouldn’t expect us slash right through, but anything can happen um, but uh yeah. I kind of expect that we would just um re-test some of that, that zone in there, because we spent so long playing around in there in that zone of discovering 50 to 60 um and then wow. If we break all time high from um from you know, that was at 64. uh. Well, it was all-time high.
I can’t even remember it was around 64. yeah. I mean yeah. If we break that, then we’ll be off to the races again yeah i like. I have this model right, which is the band in which it floats with in the upper bound and all the past cycles.
We we hit the upper bound before it ended um, but of course it’s a moving target. There’S a great situation where i don’t have to be exactly right, because it’s it’s a moving target. I can keep adjusting it because it’s just a model um. You know the upper band today is 162 000 and we just don’t know which which trajectory. But it is the current trajectory is around it’s just.
You know it’s because of this, this major pullback um and it does run on the historic averages of the price movements um. I was just thinking you got this bit and if it was at the top of the bull market, i’m like going yeah that’s contingent on a definition of the top of a bull market. If we just keep wandering upwards, like you know, like dan howell’s super cycle, downhill supercycle is really. I think we skip a cycle. We just go to the next.
Well, if that actually happens – and we go to the next there’s not going to be an x cycle, because the hardenings don’t need squat um, more participants coming in per per week, and actually, when we talk about user growth, it’s actually it’s user net growth. It’S counting! The new guys that have just appeared on the blockchain and they’re, like that’s a new person, because it’s completely new to to um, if not it, didn’t, go to an existing cluster. So that’s new and then you look at existing clusters and you go ah that dude just emptied all their wallets and it’s all zeroed. So that’s one user lost out of the network because they no longer hold bitcoin and new users coming in and you do the net balance of that per day and that is um.
The net user growth um. Hardly ever, do you see the the user growth go below zero per day? Usually, it’s um, i think we’re now what 40 50 000 new users per day zone, wow even higher um and then you’ve got to multiply by three, because there’s a ratio of um people signing up to exchanges like coinbase who never withdrawal um. They might you know, maybe they install strike and then they put like their funds straight in from their ach account or whatever, and they just hold it in their their custodial wallet there and they don’t um. They don’t even pull it on chain right.
So there’s a lot of people: they actually have exposure to bitcoin. They might have it on cash app, but they don’t actually pull it to the on-chain wallet. So we never see that there’s um there’s a three to one ratio. So you multiply that number by three. Roughly and um that’s how many users you can assume that the what we’re seeing on chain is a shadow of what the real numbers are doing on exchanges yeah, it’s millions per month, uh, you know, with roughly 150 million users.
Currently um doubles every year. Rule of thumb, kind of like a moore’s law um, so yeah we’ve got like we’ve got 300 150 million people to come on board in the next year. Um. My current trajectory are you seeing much from el salvador, because i’m kind of wondering, because i’ve never like there’s a lot of little guys and they’re stacking like they’ve never been before, and i’m just wondering if this is the imprint of a nation-state onboarding. We must be seeing that might be what i’m seeing on jane with the amount of new users hockey sticking you.
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