The end of the bear market, is currently the Holy Grail of the crypto-Sektos. Is achieved in the case of Bitcoin, the floor? A look at various metrics is still critical.
Dr. Philipp Giese
8. March 2019BTC$3.909,22 0.63%part Facebook Twitter LinkedIn xing mail
The market capitalisation has had to endure a lot of criticism lately. No wonder, finally there are many reasons to see her as at best an indicative value. Other sizes that want to measure the value of a crypto currency, have been proposed from different sides.
An example for such sizes, the real capitalization. The Coinmetrics developed real capitalization is not simply a product of the current price and Supply, but a sum of all the rates of the various Coins at the time they are moved. The oldest Bitcoin are according to this view, zero dollars, while since January of 2018, holding the Token would still contribute about $ 10,000 to the real capitalization.
Unrealized gains, and the mood of the market
The market capitalisation together with the real capitalization for the assessment of market cycles. You could consider, such as the difference of the two values. There would be no Hodler, but all the Coins are constantly moving, would be the real capitalisation is equal to the market capitalization. The longer the Coins are held back, the more the difference between the market and the real capitalization is on the rise.
the difference between the two sizes, you should be able to learn something. A kind of purchasing power or the like would have this view. Tuur Demester has developed, with some colleagues from Adamant Capital, therefore, a size called Unrealized Profit Loss. It is the difference between market capitalization and real capitalization. Dividing this size by the market capitalization, the result is an indicator that captures the mood of the market. The Unrealized P/L Ratio in the bottom figure below the market and a real capitalization of listed:
We can see that falls times of great Price to the Unrealized Profit/Loss Ratio in the negative range decreases. The market capitalization falling below the real capitalization. In bullish times, it rises above zero and reached at about 0.6 their climax.
Alone, which is not uninteresting. According to this view, an Investor can Have with the classic question of “the ground behind us” with the question “Is increased, the Unrealized P/L Ratio about Zero?” answers. And it is not yet available.
Hype, frustration and the Delta-capitalization
A not dissimilar size, called Delta-capitalization, most recently, David Puell presented on the Medium. The Delta-cap is a size that should also help investors in the assessment of the market situation. In you also of market capitalization and real capitalization flow, the former, however, only indirectly: Instead of the normal market capitalisation, David Puell considered an average market capitalization. The average market capitalization is the average of the current market capitalisation and all previous. It is so similar to the real capitalization, a much smoother curve than the market capitalization.
The Delta-capitalization is the difference between the actual capitalization and the average market capitalization. The different sizes of see in total, as follows:
the well-known market in black and capitalization. Bright blue is the real capitalization. The average market capitalization is plotted in green, while the Delta-capitalisation is shown in the red line.
Alone in the raw data, we realize that is close to the market capitalization of Delta-capitalization, reached to the floor. This is not to say, however, that one has the floor. The year 2015 revealed that the Bitcoin can stay the course long at these heights.
Maybe you can still pull more out of the data. David Puell suggests a further relationship between the market -, and Delta-capitalization. In English the term Market value to a delta value or short-MVDV. Figure below shows this in comparison to the various capitalization:
on the fall of A few things:
The Peaks, which coincide with the hype of the phases are small. The hype phases are so distinct, less and less. This is absolutely not negative, it shows that the purely speculative aspect of decreases in these phases.”The ground” is, according to this view, always approximately at the same height, of approximately 1.RVDV and DVAV for the assessment of bull and bear markets
David Puell has created the Delta-capitalization is an interesting tool. Two conditions, he has not presented so far. This is surprising, as these two actually represent two interesting indicators.
In the first ratio we look at the relationship between the real capitalization and Delta-capitalization. For a better distinction we call this size RVDV (real value to the delta value). It represents a measure of the bullish character of the price development. This size is related to the ratio between Delta-capitalization and average market capitalization, DVAV (delta value to average value). This size can help in the search for the much-cited ground.
RVDV and DVAV tell very similar stories, but each has a slightly different focus. The first Ratio helps to estimate when the cops determine again the rate, while the latter can answer the question to the floor is useful.
The Nice thing is that we have guidance numbers for the floor, for a coming bull market for bubbles:
From a real soil formation is the process in which the DVAV-Ratio is significantly below two.The first signs of a reversal of the trend that sustained the cops come back on the market, in a RVDV-Ratio of 1.7.The bubble is close to Bursting, if we have a RVDV below 1.2 or DVAV about six.
a Little second, it is striking that The Decay behavior of the DVAV Ratio or the Increase in the RVDV-Ratio is always flat. This is consistent with the smaller Peaks of the MVDV and the assumption of a logarithmic increase in the Bitcoin price. It also means, however, that the bear markets will be longer and longer.
“Is this the bottom?” An assessment of the market situation for Bitcoin
We have now met a lot of tools, the complementary angle of view on the market situation. According to the Unrealized-P/L-Ratio, we have arrived at the ground. The experience of the bear market of 2014 and 2015 taught us, however, that investors also need to have a long breath. Similar is read from the MVDV Ratio.
With the two new Ratios, the RVDV – DVAV-conditions, we can approach the classic question, “is this the bottom?” a little further. Unfortunately, the answer is disappointing: Until the end of the floor is still a way to go – not to mention a burgeoning bull market.
This must not be achieved per se, with a dramatic slide in prices. The course should follow its current sideways position, would nevertheless increase the DVAV Ratio due to a rise in average market capitalization. So let’s wait, what time is the DVAV Ratio falls below two.
Until then, it is with respect to Bitcoin: A long breath, on variables such as the sliding average of the last 20 weeks, pay close attention and, perhaps, other Coins as the Top 10 and value pairs with BTC as the base view.
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