Wednesday, October 6, 2021

How to get the most out of on-chain analysis - HAVE FUN!

Hey Banter Fam!

I wanted to share with you something I put on Twitter that may help to understand and interpret on-chain data for yourself.

There are a tonne of great OC analysts out there on Twitter like @woonomic, @TXMCtrades, @WClementeIII, @_Checkmatey_, @CryptoVizArt amongst many others. They all put out amazing analysis, but their comments sections are inevitably filled with "What does this mean?" or "So wen moon ser?"

I'm now a full-time crypto guy, but in a past life I made my living making super nerdy data relatable to people who weren't interested in getting in the weeds of data analysis to fully understand it all.

Even with a background in analytics, my head sometimes swims trying to get to the bottom of what some of this on-chain stuff truly means, so you're not alone if you find on-chain data a little much.

With that in mind, I thought I'd have a go here at [over]simplifying it, and hopefully make on-chain more relatable for you, if you're so inclined.

It's a longish read but if you cbf reading it all, here are some quick cheat sheets to sum it all:

A summary of some commonly used on-chain metrics and how to interpret them.

A summary of the flow between Demand, Liquid Supply and Illiquid Supply.

_____________________

Back to first principles: there are 3 things price can do. Up, down, sideways. No shit!

But how does on-chain data help us know what to expect?

DEMAND (Buyers)

New market participants drive every bull run. It’s always been that way, and will always continue to be. Unfortunately, on-chain data struggles to help look ahead to what demand might be coming in, but it is great at looking backwards.

Backwards looking metrics for DEMAND could be:

Short-term HODLer (Coins held for <156 days) supply - when STH supply is increasing while LTH supply is stable, this is likely to mean new investors have entered Bitcoin.

Long-term HODLer (Coins held for >155 days) supply - drops in LTH means decreasing demand from people who traditionally HODLed.

New entities and New addresses - this is self-explanatory, but it's important to use this directionally only. Glassnode has a hard time knowing if a new address is just a new wallet from an old holder, but if this metric is going parabolic, it's almost certainly bc of new market participants.

Google Trends, crypto Youtube views/subs (a Ran metric) and general engagement across crypto socials is also a great way to see if crypto is recruiting new money.

When new investors enter the market, number go UP. When current investors don't want their coins anymore, number go DOWN. How much? Well, that depends on how much is available to buy, which brings me to...

LIQUID SUPPLY (Sellers)

Often analysed right now is the declining volume of BTC being held by liquid entities. That is, if a bunch of new people wanna buy, there probably won’t be enough to go around.

In isolation, declining liquid supply means number go SIDEWAYS or UP.

In terms of what it means for upward pressure. The magnitude of the supply squeeze determines to degree of upward price movement when multiplied by the new market participants (new demand).

The sideways part is important. People disregard that, but limited supply is irrelevant if there isn’t increased demand. And the way this is measured is primarily though LTHs. This means liquid supply can decline w/o and buying. So price doesn’t necessarily have to increase as this decreases.

Some measures for LIQUID SUPPLY:

Balance on exchanges - The most liquid supply there is.

Short-term HODLers (Coins held for <156 days) supply or STH % of supply - A large percentage of this cohort is risky because traditionally this group is more likely to sell BTC. They represent more liquid supply.

Profit metrics like SOPR, NUPL and % in profit/loss can be good to get a feel for the mindset of STHs and anticipate the likelihood of their supply becoming illiquid. If we're finding that STH are selling as soon as they reach breakeven, it's a good indication they won't be migrating to LTHs any time soon so we will struggle to see sustained price growth.

Open interest and funding rates - These aren't on-chain metrics but in the event of quick price moves, this indicates how much that move will be accelerated by stop losses or liquidations. High long funding + price declines brings new sell orders (new liquid supply) = quick dump. These are freely available from Bybt.com.

Many analysts will aggregate cohorts into Illiquid, Liquid and Highly Liquids Supply groups.

STHs profit/loss ratio

ILLIQUID SUPPLY (HODLers)

And now to Long-term holders AKA strong hands AKA illiquid supply. This is your measure of what happens when it all falls to shit. That is, how much we will dump in the event of a sell-off.

So in a bull run, if this starts declining (ie. LTHs sell), it means more supply is becoming available to meet demand. Eventually this selling has a slowing effect on price which negatively impacts fresh demand and when that declines, you have what they call a blow-off top.

LTHs sell into bull runs until demand no longer meets the over-supply causing a blow-off top.

In a neutral or declining market, then it can indicate if a May 19-like dump is coming.

You can also look at profit metrics like SOPR, profit/loss or NUPL to get a feel for if LTHs may be reaching a profit-taking price zone. If this is the case, we can anticipate sell pressure ahead, therefore a decline in illiquid supply.

Measures to watch for ILLIQUID SUPPLY:

LTH supply or LTH % of total supply

LTH in profit/loss or LTH NUPL to understand potential if they might sell soon.

Miner net position change - if miners are selling, illiquid supply is becoming liquid.

Open interest and funding rates. These aren't on-chain metrics but in the event of quick price moves, this indicates how much that move will be accelerated by stop losses or liquidations. High short funding + price increases brings new buy orders (less supply) = quick pump. These are freely available from Bybt.com.

When LTHs reach high-profit zones, we can expect upcoming sell pressure.

Miners displaying sell pressure means we can expect less ILLIQUID and more LIQUID supply to come.

But as mentioned earlier, an increase in strong hands in isolation doesn’t mean number go up necessarily. Maybe a little, but nothing like what we’d need to reach $100k.

What we need for $100k+ is new market participants. That’s it. That’s why we keep talking about ETFs, Walmart, Amazon, Apple, etc. Because something significant needs to happen to convince people to buy BTC for the first in their lives at $50k+.

___________________

I've seen a lot of criticism of on-chain analysts saying they've been wrong. It's possible that at times they misinterpret some data. But on-chain data isn’t right or wrong or misaligned to price. It's just an incomplete view because it doesn't truly show demand dynamics.

Yes, this is an over-simplification and there's a lot of nuance. But for me, it just helps frame my interpretation of all this amazing data and its expected impact on price. The cheat sheets aren't exhaustive by any means. My hope is this info is helpful to you in being able to draw your own conclusions from the data shared by some of the analysts out there. If you have any questions about this, I'll be happy to discuss.

But to give you the answers to the test:

Liquid supply is very low and Illiquid supply is at an ATH. If (and it's an if!) we can get some fresh new demand into crypto, NUMBER GO UP BIG.

Credits for charts go to TXMC on Twitter: https://twitter.com/TXMCtrades?s=20. Charts have been used with his permission.

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Could the sudden crypto surge be related to the looming Default in the US Economy?

I've read countless articles today about the crypto markets and one thing seems to be consistent amongst them. Some of the best economic experts say that the only winner in the event of an Economic default, is Crypto currency. Connected to another article saying that Bitcoin will overtake the US dollar by 2050 becoming the dominant currency in the world. So with that being said, the economic default is looming and crypto markets are surging, this can't be a coincidence right. What's your take on it people.

Hedera Hashgraph (ℏ) DD

Ħello All. Ħello Future.

I have put this together to compile all the information I have come across on this wonderful project, and hope it will help all ℏBAR-Barians new and old.

Introduction

Hedera Hashgraph is a 3rd Generation Distributed Ledger Technology (DLT) created by US Air Force computer scientists Leemon Baird and Mance Harmon operating in the Decentralised Finance (DeFi) space. You can learn more about DLT technology here and the definition of DeFi here. Renowned mathematician Baird fashioned the Hashgraph Algorithm which dramatically improves upon current blockchain technology and offers a fully decentralised solution, scalable to enterprises of all sizes across the globe.

Hedera patented solution achieves the highest grade of security theoretically possible, Asynchronous byzantine fault tolerant (ABFT), whilst maintaining the fastest transaction speeds and extremely low energy consumption. All of this, coupled with complete finality and low fixed fees, Hedera offers a turnkey solution to enterprises for public ledgers. Unlike any other public network available, Hedera is governed by a council of globally recognised/respected companies, banks and universities on every continent (excl. Antarctica). Some examples include Google, IBM and Boeing; however, the full Governing Council can be found here, and the list is really impressive. HBAR( ℏ ) is the native, energy-efficient cryptocurrency of Hedera that powers the decentralised economy.

Features

Hedera Hashgraph offers an array of features and services. There are currently two primary services which include:

Hedera Token Service – Configure, mint, and manage fungible and non-fungible tokens on Hedera without needing to set up and deploy a smart contract.

Hedera Consensus Service – Send event data to the public ledger for immutable, verifiable, and fairly ordered records of applications and layer -2 networks.

No Fork Guarantee – As the Hashgraph consensus algorithm is exclusive with open review code, the network and its cryptocurrency have a no-fork guarantee. This ultimately means that other ‘versions’ of the blockchain cannot be created, which ensures stability of development for application builders, and long-term confidence in the network.

There are many other capabilities and additional functionality that Hedera offers including scheduled transactions, multi signature transactions, atomic swaps, file services and smart contracts 2.0, interactable with native Hedera services, like HTS. View Here.

More information on these can be found by clicking the links.

https://preview.redd.it/32myfy4exvr71.png?width=1630&format=png&auto=webp&s=0a20536a6abe505f7b7b778f89f26608f620c061

True Decentralisation

The common misconception with Hedera Hashgraph is the fact that it is not a decentralised network. This is factually incorrect.

The official definition of ‘Decentralisation’ is the following; “the transfer of control of an activity or organization to several local offices or authorities rather than one single one.”

In an effort to decentralise, Hedera has top tier organisations spread around the world, operating on different continents and under different governments. These are highly respected, reputable and trusted organisations. The Governing Council run the nodes and the nodes are distributed across the world. Currently the Governing Council is made up of 23 members but there will be a total of 39 in the near future. The Governing Council share equal vote in the direction of the software and each member has a limited 3-year maximum term, with up to 2 consecutive terms.

The current Governing Council clearly speaks for itself…

https://preview.redd.it/kcael28fxvr71.png?width=1728&format=png&auto=webp&s=abee638b1d5529e0696899274ea9c3a903a0fb83

Once the network grows, Hedera will introduce ‘Mirror Nodes’. Anyone in the world is able to download and run a node on the Mirror network, and a Mirror Node gets cryptographic proof that all the data is absolutely the consensus and is correct. This ultimately further increases decentralisation.

Something could be said for many other cryptocurrencies being more centralised than people actually think, as large mining pools are not known, transparent and/or trusted. In some cases, these large mining pools could control the majority supply.

Leemon explains this really well in this interview (timestamp 14:10).

Management & Ownership (Swirlds)

Hedera was founded by Hashgraph inventor Leemon Baird and his business partner Mance Harmon, and has an exclusive license to the Hashgraph patents held by their company. Swirlds, the creator of the Hashgraph Algorithm, has a permanent seat on the Governing Council and an equal vote. More information on the MLA agreement between Swirlds and Hedera can be found here.

HBAR Foundation

“The Hedera Governing Council, the group of diverse organizations responsible for stewarding the Hedera network, has announced the approval of a plan to allocate 10.7 billion HBARS (approximately 20% of total supply), currently worth US $5 billion as of September 16th, 2021, towards the development of the Hedera ecosystem.”

“Hedera's Governing Council has initially earmarked up to 5.35 billion HBARS, worth approximately US $2.5 billion as of Sept 16th, to the newly established independent HBAR Foundation. The HBAR Foundation will have autonomy over the administration, development, and deployment of its HBAR distributions, and will provide grants to developers, start-ups, and other organizations to accelerate the development and adoption of the Hedera network for a wide variety of applications in decentralized finance (DeFi), non-fungible tokens (NFTs), Central Bank Digital Currencies (CBDCs), gaming and other industries. The HBAR Foundation will be led by Shayne Higdon, a hands-on enterprise software executive with significant venture capital and private equity experience, having led 40+ M&A and corporate venture transactions in areas such as SaaS, multi-cloud, application performance, and identity management.”

This is something that is really exciting and that is completely non-existent in the crypto space and will drive teams of people globally to begin building on the Hedera network ultimately identifying new use cases and growing the ecosystem. Watch this space!

Greenest PoS DLT

Energy consumption has a huge role to play in the economy and innovative enterprises. The costs of the likes of Bitcoin and Ethereum can no longer be ignored. With Hedera surpassing the number of Ethereum transactions, and processing more than 100,000 TPS (competing with Visa!), it’s only a matter of time before expensive methods become obsolete.

The UCL team used a mathematical consumption model that predicts expected energy consumption per transaction, as a function of network load. Applying this model to six different PoS-based DLT systems confirms that Hedera Hashgraph energy consumption per transaction is indeed at least three orders of magnitude lower than that of Bitcoin. Furthermore, UCL discovered significant differences among the analysed PoS-based systems themselves. View Here.

https://preview.redd.it/fafbvgthxvr71.png?width=1001&format=png&auto=webp&s=a40240c37b13b985360ea6ead9f5a5e838d1863f

https://preview.redd.it/5qagpanjxvr71.png?width=1747&format=png&auto=webp&s=13ee1a8660fc11d3a6ff5a7c7d52f2bacb18a27e

Future Road Map

Hedera has a clear and transparent roadmap available which improves on their Network, Ecosystem, Performance & Scale, Decentralisation and Smart Contracts. See below;

Q4 2021

HTS Improvement for NFTS
Flexible Token Associations
Reactive Native SDK

Q1 2022

Longer Term Scheduled Transactions
Scalable Smart Contracts
Additional Mirror Node Data Scalability
Sustained Network Performance Optimisation
Additional Network Automation
Upgraded Developer Portal

Q2 2022

Hedera Improvement Proposal
Enable Ecosystem Integrations
Permissioned Community Nodes
Enable Staking Rewards Programs

You can view more details on the Hedera roadmap here.

Resources:

Use Cases

Shout out to u/Jakertrader47 for posting, you can find all the use cases here: https://www.hbartothemoon.com/allcases

FUD (Fear, Uncertainty & Doubt)

I really liked this post from u/divertss and wanted to include it as it outlines and combats any elements of common FUD surrounding HBAR, so make sure you check it out.

Worth a Watch

https://www.youtube.com/watch?v=IjQkag6VOo0&ab_channel=HederaHashgraph
https://www.youtube.com/watch?v=wqpRU2deHlo&ab_channel=HederaHashgraph
https://www.youtube.com/watch?v=R6R3TKXyofY&t=1128s&ab_channel=Cryptocito

If you enjoyed this post, and would like me to do a follow up post diving into the the financials (Market Cap / Price Action / Stock Price) and use cases then let me know.

Continue to Part 2 Here!

Oslo Freedom Forum 2021: Human Rights + Bitcoin, Event Recap

https://youtu.be/W9x0JFP_ytI

CLNE can't lose...It's such a No-Brainer 10-06-2021

If you help the Farmers, you'll get the Republican Politicians. And RNG is Green. For real! It's Carbon Negative. How many fuels are Carbon Negative? Wind and Solar are not even Carbon Negative. They're Neutral, almost.

RNG, If you use it, is a negative charge against a Corporations Carbon Footprint. If you use RNG, you've taken a naturally occurring gas in Animal Farming, Methane, (If you conclude that the consumption of Animal products for food, by Humans is natural and unavoidable for sustaining Human Life. A discussion for another time) You've stopped, this Methane gas from entering the environment which contributes to Climate Change.

Sequestering the Methane, in a way, before it gets into the atmosphere. You're Carbon Capturing, in a way, a pollutant and using it to create energy. Therefore, you are removing Carbon from the atmosphere and preventing it from going into the atmosphere.

Now here comes the pay off.

As public policies change, Corporations will become able to deduct the Carbon Credits, that will, eventually, become a tradable asset, like Bitcoin, from their Carbon Footprint. And, to accelerate this process, It's just a matter of time before Corporations will be able to make money by being Carbon Neutral because there will be a Tax, or Fee, that the Global Community will demand be paid for continuing to aid the destruction of the Global Ecosystem. This Tax or Fee will probably not become realized for at least 4 more years though. Not until the exponential growth of major weather events becomes obvious to the most uninformed in our society, and the global financial systems will become so stressed by the storms economic costs that action will finally take place.

On a side note;

Unfortunately we all live in a Crisis driven Society. Change is not logically driven, it's emotionally driven. People, society, can't handle the truth. Or doesn't want to.

When Mitt Rommey said, at the Republican National Convention in 2012, "Barack Obama wants to stop the oceans from rising", everyone in the audience just laughed, and laughed, and laughed. I wonder if they're all still laughing after Houston freezes and, Louisiana gets hit by 3 hurricanes this year, and a nice oil spill in CA? When Jimmy Carter, in 1979 said that the country needs to move to smaller cars and put solar panels on the WH, they voted him out of office and Ronald Reagen took the solar panels down as Nancy consulted with a Clairvoyant. Ah, the republican politician, forgive them Lord, for they know what they do. Debt Ceiling, hello.

Back to topic;

As powerful-finding-97 mentioned in a comment about my article of yesterday, CLNE is a Chess piece. And it is. And what's the end game? What does winning look like in this larger global chess game? In this Amazon-BP-Total-Chevron-UPS-WM-Cummins-Westport-CLNE, et al, Long Chess move strategy.

The Goal; The prize is;

ZERO CARBON FOOTPRINT FIRST!

That's Amazon's game. That's BP, Total & Chevron's play. Any Company that can advertise that it is Carbon Neutral, or on it's way to becoming Carbon Neutral, will get the customers, and the government tax subsidies & incentives. Just imagine you have a choice to buy at Target or Costco or Walmart or Amazon online, but Amazon is Carbon Neutral. Who gets the business?

Fight Back Guys, Fight Back...Stay above $8. RJC

[Wed, Oct 06 2021] TL;DR — Crypto news you missed in the last 24 hours on Reddit

r/Bitcoin

C_hase

Why does everyone think Bitcoin is so volatile? Just do this.

Wednesday, October 6, 2021

DEMAND (Buyers)

LIQUID SUPPLY (Sellers)

ILLIQUID SUPPLY (HODLers)

So, what the heck is Particl ?

What's behind the hood of Particl ?

Their Flagship dApp: Particl Marketplace

The Particl Coin

Why such a low Market Cap then ?

CONCLUSION