OP 31 August, 2021 - 04:09 PM
(This post was last modified: 31 August, 2021 - 04:10 PM by stefritt10. Edited 1 time in total.)
It was puzzling why miners stopped selling in March (reference Miner Position Index) as Bitcoin continued to post notably higher highs. Miner Position Index - MPI - basically tells you if the average miner outflow (selling) is more or less than the 365 day moving average.
This is important because miners are regarded as "smart money;" in order to be successful they need to time their selling with greater accuracy than the average trader. The only indicator I’ve found possibly correlating to their HODL'ing in March is NVT Golden Cross, which is a Willy Woo derived indicator that measures network volume and market cap to derive an oversold or overbought signal.
NVT painted a failed bullish retracement, followed by a strong bearish spike, on 03 March. 03 March also happens to be the same day that miners began to HODL and we observe a significant decline in miner outflows (selling) for the remainder of that bull market. That failed bullish retracement/recovery to the bullish range on NVT Gold Cross was the first observed bearish breakdown of NVT during the 2021 bull market at that point.
Speculative of course, but it lines up from a timeline perspective, and NVT data is something likely familiar to miners because it deals in transaction value. I suspect they paused selling there to provide market relief, but the NVT Gold Cross continued to spike into a very bearish range, indicating a larger selloff was coming, and it did, but not as quick as the miners may have thought.
What is the "So What" Here? My "so what" is that there is always value in watching what miners are doing, they don't always nail the cycle tops perfectly but they try their best; and also watch the NVT Gold Cross in the future (available on Cryptoquant), which might provide at least a general reference of overbought or oversold market conditions and can be used to help validate other indicators like RSI.(edited)
![[Image: NVT_to_MPI_Correlation_Explain_Miner_Sel...height=627]](https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fmedia.discordapp.net%2Fattachments%2F831648840586100846%2F882101039652810772%2FNVT_to_MPI_Correlation_Explain_Miner_Selloff__no_text.png%3Fwidth%3D1440%26amp%3Bheight%3D627)
This is important because miners are regarded as "smart money;" in order to be successful they need to time their selling with greater accuracy than the average trader. The only indicator I’ve found possibly correlating to their HODL'ing in March is NVT Golden Cross, which is a Willy Woo derived indicator that measures network volume and market cap to derive an oversold or overbought signal.
NVT painted a failed bullish retracement, followed by a strong bearish spike, on 03 March. 03 March also happens to be the same day that miners began to HODL and we observe a significant decline in miner outflows (selling) for the remainder of that bull market. That failed bullish retracement/recovery to the bullish range on NVT Gold Cross was the first observed bearish breakdown of NVT during the 2021 bull market at that point.
Speculative of course, but it lines up from a timeline perspective, and NVT data is something likely familiar to miners because it deals in transaction value. I suspect they paused selling there to provide market relief, but the NVT Gold Cross continued to spike into a very bearish range, indicating a larger selloff was coming, and it did, but not as quick as the miners may have thought.
What is the "So What" Here? My "so what" is that there is always value in watching what miners are doing, they don't always nail the cycle tops perfectly but they try their best; and also watch the NVT Gold Cross in the future (available on Cryptoquant), which might provide at least a general reference of overbought or oversold market conditions and can be used to help validate other indicators like RSI.(edited)
(31 August, 2021 - 04:09 PM)stefritt10 Wrote: Show MoreIt was puzzling why miners stopped selling in March (reference Miner Position Index) as Bitcoin continued to post notably higher highs. Miner Position Index - MPI - basically tells you if the average miner outflow (selling) is more or less than the 365 day moving average.
This is important because miners are regarded as "smart money;" in order to be successful they need to time their selling with greater accuracy than the average trader. The only indicator I’ve found possibly correlating to their HODL'ing in March is NVT Golden Cross, which is a Willy Woo derived indicator that measures network volume and market cap to derive an oversold or overbought signal.
NVT painted a failed bullish retracement, followed by a strong bearish spike, on 03 March. 03 March also happens to be the same day that miners began to HODL and we observe a significant decline in miner outflows (selling) for the remainder of that bull market. That failed bullish retracement/recovery to the bullish range on NVT Gold Cross was the first observed bearish breakdown of NVT during the 2021 bull market at that point.
Speculative of course, but it lines up from a timeline perspective, and NVT data is something likely familiar to miners because it deals in transaction value. I suspect they paused selling there to provide market relief, but the NVT Gold Cross continued to spike into a very bearish range, indicating a larger selloff was coming, and it did, but not as quick as the miners may have thought.
What is the "So What" Here? My "so what" is that there is always value in watching what miners are doing, they don't always nail the cycle tops perfectly but they try their best; and also watch the NVT Gold Cross in the future (available on Cryptoquant), which might provide at least a general reference of overbought or oversold market conditions and can be used to help validate other indicators like RSI.(edited)
Graph for anyone interested, if you can see it.