The difference between Bitcoin's market cycles in 2017 and 2021
The difference between Bitcoin's market cycles in 2017 and 2021
This analysis takes a closer look at some of the structural market indicators of Bitcoin and compares the current cycle with that from 2017.
The following was compiled by an on-chain analyst Cryptovizart for cryptopotato.
Bitcoins nvt
nvt estimates On-chain investor volums. Since the crypto analyst Willy Woo originally introduced this model, the NVT price is calculated by multiplied by the on-chain volume by the 2-year median value of the NVT ratio (market capitalization / entire on-chain transfer volume).
in 2018, after reaching the tip of the cycle, both the 30-day and 90-day MA of the NVT price have been decreased continuously for almost 12 months. Since the decline by 50% in May 2021, however, these sliding average has increased to a level over their previous maximum stalls of 64,000.
This variation of the NVT-based price results could be transferred to a higher institutional level of activity compared to retailers.
categorical analysis of on-chain activity
Historically in all former Kryptomark cycle On-chain transfer volume as well as the median rose over four times their 360-day-MA level and then fell 1 times of their 360-day-MA.
The middle and medium size of the on-chain transfer volume are the proxies for larger and smaller transactions. If the mean is increasing, this means that transactions with high volume take place more often. The medium size, on the other hand, is a proxy for small transactions that are attributed to retailers.
Surprisingly, there was no over 4x leadership. In addition, the average has always correlated with the median, which means that the activity level for large companies and for smaller retailers with the price rally to the new ATH has increased to more than four times its 360-day-MA.
Surprisingly, there was a significant deviation between the median value and the mean. This divergence also indicates the footprint of larger units in this ecosystem with a different conviction and vision.
The Fund Flow Ratio from Bitcoin: Are here Invisitional?
based on the apparent footprint discussed above, another valuable on-chain index called Fund Flow Ratio can be examined in order to evaluate this assumption.
Institutional actors transferred their assets predominantly from the stock exchanges (on-chain). Therefore, we can pursue the weighting of the category by measuring the Fund Flow Ratio (on-chain transfer volume, which is not sent on exchanges/deducted from stock exchanges, divided by the entire on-chain transfer volume). The investigation of the historical trend of this relationship shows that it decreased after reaching the ATH and entering the bear market.
However, this relationship has increased since January 2021 despite the market correction of 50% in May. Almost 96 % of on-chain transactions are not attributed to the withdrawals/deposits of the stock exchanges. The simple conclusion may be that institutional engagement in cryptoma markets increases.
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