Using Past Bitcoin Volume To Predict Future Price
$ / Tick is calculated using 1 tick = $0.01 What you're doing is taking the total volume executed across ALL the exchanges... Then subtracting the HIGH and the LOW to get the range.. then dividing the two . What that does is evenly distributes/allocates volume to each tick of price movement on the bar. these are daily bars.
e.g $1.00 = 100 ticks. Volume 5000, Range High to Low = $100 (Ticks = 10000)
0.5 BTC of volume executed in every tick (5000 BTC / 10000 Tick Range)
This is converted to $ amounts using the average price. So the numbers on the posted on the chart is the Volume Per Tick that was executed that day * multiplied * by the $$ of dollars spent that day on volume.
e.g. Average price = $3,000. 0.5 BTC (from above) * $3,000 (average Price) = $1,500 spent in every tick.
This is then summed. Another way to express it is { * Average Price (OHLC4) }
So here's what has happened since 2013:
It topped out at the peak in 2013. Since, it increased steadily from the 2013 top until hitting 10x the $275k figure from the 2013 top (from $275,000 to $2,500,000 Dollars Per Tick) in January 2017. It then stayed stable throughout 2017 after breaking the old 2014 ATH of $1,100 / BTC. It continued to remain Stable until we hit the ATH at $20k, Dec 2018.
It then began increasing again until the bottoming/accumulation in Jan/Feb 2019. Then came the bullish leg up. IN SPOT BTC it has since been decreasing. This should, in theory, be a bad sign. (i.e. "Low volume pump")
HOWEVER, if you factor in that most trading is happening on Bitmex and now Bybit... we can add those Dollars per Tick & Volume as well. Doing so, we are currently at 4.5x of the Dollar Per Tick amount of the 2018 top ($2,500,000 to $11,100,000)
.
Conclusions:
If we include derivative volume we would infer that we have to finish generating double the economic mass (in the trading ecosystem) and we'll be off to our upper targets of 300k.
If we conclude that derivative is "fake volume" because it's not real bitcoin, but rather "paper bitcoin" and thus discount it. We're likely in a B (or X) wave and I'll get my $1200 bitcoin.
My inclination is that we are in a bull market and will see new ATH's. I don't think I'll get my $1,200 bitcoin =(
However, I would imagine that by this analysis, we can conclusively settle the argument if there ever was one: Derivatives are driving the market. Bitcoin and its 21 million supply may still be a part of the value proposition but with 100x availability in more and more places, a supply limit is a figment of the imagination when it comes to supply/demand and price discovery. Derivatives create an infinite supply of bitcoin by just adding 0000s to your position size and executing it against the market. The arb bots and indexing functions keep the price at parity, so, exchanges do have to move together. But, through margin, there is virtually an unlimited supply of Bitcoin
FLAMER DISCLAIMER:
Target is arbitrary... it should carry no weight. This is not a precise price prediction. Time to the right of the chart is arbitrary, this is not a precise timing prediction.
DYOR - Do Your Own Research. I present the data for your analysis... not because I'm convinced I'm right. I'd be happy to hear contrary thoughts
e.g $1.00 = 100 ticks. Volume 5000, Range High to Low = $100 (Ticks = 10000)
0.5 BTC of volume executed in every tick (5000 BTC / 10000 Tick Range)
This is converted to $ amounts using the average price. So the numbers on the posted on the chart is the Volume Per Tick that was executed that day * multiplied * by the $$ of dollars spent that day on volume.
e.g. Average price = $3,000. 0.5 BTC (from above) * $3,000 (average Price) = $1,500 spent in every tick.
This is then summed. Another way to express it is { * Average Price (OHLC4) }
So here's what has happened since 2013:
It topped out at the peak in 2013. Since, it increased steadily from the 2013 top until hitting 10x the $275k figure from the 2013 top (from $275,000 to $2,500,000 Dollars Per Tick) in January 2017. It then stayed stable throughout 2017 after breaking the old 2014 ATH of $1,100 / BTC. It continued to remain Stable until we hit the ATH at $20k, Dec 2018.
It then began increasing again until the bottoming/accumulation in Jan/Feb 2019. Then came the bullish leg up. IN SPOT BTC it has since been decreasing. This should, in theory, be a bad sign. (i.e. "Low volume pump")
HOWEVER, if you factor in that most trading is happening on Bitmex and now Bybit... we can add those Dollars per Tick & Volume as well. Doing so, we are currently at 4.5x of the Dollar Per Tick amount of the 2018 top ($2,500,000 to $11,100,000)
.
Conclusions:
If we include derivative volume we would infer that we have to finish generating double the economic mass (in the trading ecosystem) and we'll be off to our upper targets of 300k.
If we conclude that derivative is "fake volume" because it's not real bitcoin, but rather "paper bitcoin" and thus discount it. We're likely in a B (or X) wave and I'll get my $1200 bitcoin.
My inclination is that we are in a bull market and will see new ATH's. I don't think I'll get my $1,200 bitcoin =(
However, I would imagine that by this analysis, we can conclusively settle the argument if there ever was one: Derivatives are driving the market. Bitcoin and its 21 million supply may still be a part of the value proposition but with 100x availability in more and more places, a supply limit is a figment of the imagination when it comes to supply/demand and price discovery. Derivatives create an infinite supply of bitcoin by just adding 0000s to your position size and executing it against the market. The arb bots and indexing functions keep the price at parity, so, exchanges do have to move together. But, through margin, there is virtually an unlimited supply of Bitcoin
FLAMER DISCLAIMER:
Target is arbitrary... it should carry no weight. This is not a precise price prediction. Time to the right of the chart is arbitrary, this is not a precise timing prediction.
DYOR - Do Your Own Research. I present the data for your analysis... not because I'm convinced I'm right. I'd be happy to hear contrary thoughts
(top indicator and $ figures on chart - Spot Only)
Coinbase (USD & EUR)
Kraken (USD & EUR)
Bitfinex (USD & EUR)
Binance
bitFlyer
Bithumb
Bitstamp (USD & EUR)
HitBTC
Bittrex
Poloniex
Bitstamp
CEX.io
Korbit (KRW)
Price Info From: BLX
Derivatives Platforms used include:
Bitmex (Middle Indicator)
Bitmex + Bybit (Bottom Indicator)