Bitcoin Bearish or Bullish? Here my thoughts: JULY UPDATE (+POLL)

[finbad]

Excellent analysis as always Filippone; now more and more the bullish rather than the bearish sentiment prevails, and also several graphical indicators seem to turn positive, but nevertheless I believe that we still have to witness a last big downward leg before a real and healthy restart.

We will see the real point towards the end of the year and the beginning of 2020, with the approach of the 3 halving, where a price recovery will necessarily be required.

Yes, the sentiment is slowly turning bullish again, and halving is going to play a mayor role this time.
This is why i am reading my reports: to keep track of how things are evolving on the medium/long term and don't get lost in the daily trading noise.

It is worth reading these reports as well as the other points of view of the crypto experts. However, what we really see is that somebody wants to confuse investors and traders: BTC ups and downs happen too often.

[1713506379]

1713506379

[1713506379]

1713506379

[1713506379]

1713506379

[1713506379]

1713506379

[kronos123]

@Filippone this thread is now a fixed monthly reference point, a detailed and complete report, which embraces the Bitcoin analysis from the graph to the transactions, from the news in publications to the expected ones.
I personally believe that the fund was touched last February but I also believe that before this end of the year, between August and October, we will see an important new Bitcoin thrust, which obviously will bring down the entire market; how far he can go I can't say: I think between $ 4200-5000. It would be really horrible to break the support and the February minimum of $ 3000, with daily closing; this would mean starting a new bearish cycle, and still a long phase of adjustment and consolidation.

@finbad the ups and downs of Bitcoin have always been and always will be, as are all the assets and assets in other markets; the difference is that in the other markets we see minimal fluctuations, from 0.1% to 1% per day, while in this young market (due to its nature and its volume, minimal, almost insignificant) we observe variations even of 20 % per day.
When we have this market that will have a capitalization of 10 and over $ trillion, then we will observe minimal fluctuations!

[fillippone]

@Filippone this thread is now a fixed monthly reference point, a detailed and complete report, which embraces the Bitcoin analysis from the graph to the transactions, from the news in publications to the expected ones.

Thanks,
I put a lot of effort in this post, and I am trying to make it more and more interesting.
If you or anyone else reading this post feel I am missing some important piece of information or analysis, please let me know!

[fillippone]

Previous updates:

January	OP	3,413	4/-/1
February	Update	3,791	3/1/4
March	Update	4,096	5/3/3
April	Update	5,269	5/5/1
May	Update	8,277	5/5/1
June	Update	9,800	8/3/0

Previous Poll:




Halving: BULLISH
Last Month: BULLISH
Time Horizon: Medium

Rationale: Yes, if you read me in the past months you know this is the main reason I am bullish on bitcoin.
I was bullish for the halving even before getting in contact with PlanB, but he then more rigorously formalised what I had as a gut-feeling.



Last month I posted something regarding market anticipating halving. Well, this is probably an interesting point of view, but apparently GrayScale played down this explanation in one of their report about halving:

Is the Halving Priced In?
 

The halving is close enough that it’s time to start talking about it more seriously, but far enough out in the future that it’s unclear whether it’s priced into the market efficiently. In fact, based on anecdotal conversations with market participants, we were surprised to learn that many of them were not even aware of this event. Moreover, according to Unchained Capital, less than 32% of the bitcoins in circulation have remained in the same wallet addresses since July 2016.3 This is consistent with our own determination that a large number of existing bitcoin holders are investors who have entered the market in the last three years. For many of them, this is uncharted territory and could very well be their first halving event.

https://grayscale.co/the-next-bitcoin-halving/

This is quite interesting, as if the market is not efficient enough to incorporate all public information available yet, then there is money to be made trying to front run it. On the other hand it is worrisome that a money manager overseeing an investment pool of more than 3 BLN USD admits his clients who are so desperate investing in BTC being ready to pay a premium of over 40% also don't understand the basic concepts of the technology .


Also, Halving on his own is not a sufficient condition to provide a boost in value, rather than a necessary condition.
Something that can confirm that is the poor result PlanB had studying SF model in case of Litecoin:

https://twitter.com/100trillionUSD/status/1137352369321234432

Per request and despite the fact that I think that alts theoretically don't have 'unforgeable costliness' .. I decided to make a #Litecoin #LTC stock-to-flow model (data from Sep 2013). R2 is low .. 25%. Current S2F value is $27 (after 2019 halving $65). Can somebody pls verify?!

 


Layer 2 applications: BULLISH
Last month status: BULLISH
Time Horizon: Long Term

Rationale: Bitcoin has a low throughput for his on-chain transaction. Corollary of this Bitcoin protocol feature, is that not every transaction need the level of security guaranteed by an on-chain transaction. So we are building other solutions on the base of Bitcoin Protocol, known as Layer 2 solutions.
This is an “invisible asset” for bitcoin adoption, allowing truly decentralised, trustless, instant payments with ridiculously low fees. This will allow the creation of a whole new industry of payment processors: ending point? Competition with credit cards.
In addition to that every Layer 2 progress allows further developments (layer 3 applications I cannot even think of) and in addition to that strengthens Layer One: the Bitcoin protocol, like a big Jenga game, where every superior layer presses and consolidate lower layers adding robustness and immutability to the protocol itself (immutability of a protocol should be considered a feature, not a bug. Research the DAO disaster for an example).

Comment: Lightning Network had a massive growth in capacity and after having flattened for a couple of months has now started to decline in BTC terms MoM:



I am still bullish! LN network capacity in BTC declined, but USD terms grew more than 15%! Due to the increase in BTC USD price probably users have been taking away liquidity from nodes: if LN is really used for payments, I guess the same capacity in FIAT value can be achieved with less bitcoin, so, this why the draining in BTC terms, but actually payment capacity has increased.



As I said last month capacity is of course an important parameter, but not the only one to focus on, but there are other important factors to consider. Usability and broad user experience is one of the most important now and we saw various improvements on the software itself and third party support.
LN is anyway getting tractions, and has started to be recognised as one of the most robust candidates for Bitcoin scaling as suggested in this interesting article: Lightning Network Study. Will this technology become the new standard for Bitcoin transactions? .

Also appears that LN could be used for enhancing privacy::Samourai, Nodl to Launch Bitcoin Lightning Node With Mixing Features

Nodl co-founder Michel Luczak said this new product will be a “full, self-validating, bitcoin and lightning node” that allows people to use the mobile wallet app without relying on Samouri Wallet’s servers. This has long been a point of contention, as critics argue the wallet’s privacy features are insufficient if users’ transaction data is stored on a centralized server anyway.

The new node devices will be available this year, the Samourai Wallet team told CoinDesk. Plus, Nodl node owners will be able to update their devices to add Samourai Wallet’s Dojo software. This software will include a feature called Whirlpool, which batches bitcoin transactions together across wallets in order to obfuscate the source of funds.

Transactions number: NEUTRAL
Last month status: NEUTRAL
Time Horizon: Short Term
 
https://www.blockchain.com/charts/n-transactions-excluding-popular?timespan=180days

Rationale: transaction number can be interpreted as the “bitcoin heart beat”. If transactions are scarce means one of Bitcoin primary functions (“mean of value transfer”) is not properly working. Of course the advent of layer 2 solutions is going to make this measure less and less relevant in the future. But as far as L2 capacity is not comparable to the whole bitcoin capitalisation, transaction number cannot be discarded.

Comment: Despite dramatic rise in BTC price during last month, transaction number has remained quite flat. Transaction number is in the high “recent range” and on various days broke the 400k daily confirmed transactions, the highest levels since November 2017, but failed breaking higher, following price. This is really strange actually, as we would expect daily transaction to increase with price, until hitting maximum theoretical bandwidth:



Notably something moved also in the mempool, where there were some kind of actions after months of empty mempool:



Number of pending transactions grew notably and pending transaction fees grew up to 20 BTC, a level we didn't see since last May: market is regulating himself and getting into block is less easy after months of empty mempool.



Again this rise in fees is not perfectly consistent with transaction not picking up, also the growth in hashing power has been very spectacular, with difficulty now at historical high: this  should have more generated blocks than theoretically allowed, so more transactions being confirmed and hence more throughput.



Of course growth in hashrate has followed the price action, and not caused it, as with higher BTC price older and less efficient miners could be put back into production, raising the total hashpower adding fuel to the natural growth rate caused by more efficient ASICS being put at work. This growth in Hashrate has contributed making Bitcoin the most secure chain around. True cryptoassets require decentralisation, so securing POW is fundamental for security. Here you can see how secure is Bitcoin compared to shitcoins:

www.howmanyconfs.com



Bitcoin is 6x more secure than ETH or 23x more secure than BCH. Security of the chain is a necessary condition to value.

If you want to follow mining profitability, to have some clue about where hashrate is headed to, you can refer to this website tracking mining profitability in realtime:
Figures are maybe not really correct due to the website calculation being based on old mining specifications, but there you can get a "feeling" of the situation.



Last months we discussed one potential source of on-chain transaction coming from Veriblock, but the impact of such transactions hasn't been analysed accurately still.
For sure we can observe a rise in popularity in coinjoin services. As privacy and fungibility currently are biggest Bitcoin protocol limitation, waiting for more evolved solutions, we anedoctically observe a rise in popularity of Coinjoin rounds, that recently got in the dimension of 100 users.
Of course we are talking about decentralised solutions, as centralised anonymising solutions are facing tough times see Long-running BTC mixer Bitcoin Blender voluntarily ceases operations).
Also we note that transactions in shitcoins are going south: take the king of Shitcoin, ETH: Ethereum’s Transaction Volume is Down 40% in a Year




Bitcoin is working for what it was meant for by Satoshi: BULLISH
Last month status: BULLISH
Time Horizon: Long Term

Rationale: Bitcoin is digital gold. This means that can serve an uncensorable store of value in now derailed regimes. As more and more government indulges in hopeless funding/money printing options, in many cases BTC is the only way to preserve the right to defend your own wealth against (hyper)inflation

Last  month we looked at Colombian trading volumes on Localbitcoin, but Bitcoin Exchange volumes are soaring all over the world in derailed economies: Argentina, Colombia, Chile, Peru and Venezuela in South America, but also Tanzania, Kazakhstan and many more other countries all over the World. USD Trading volumes are still high in these days, despite BTC volatility: apparently volatility in BTCUSD is still lower than volatility observed in local FIATSHITCOINUSD:



It is also worth nothing that to be a truly uncensorable Store of Value Bitcoin has to evade legacy KYC/AML  requirements.  Recent news (see All Global Crypto Exchanges Must Now Share Customer Data, FATF Rules ) has driven more and more attention to fiat gateways, hence it is natural that people try to flee to more privacy-oriented ways to convert fiat into crypto, or viceversa.
This is what is becoming evident when we see volumes on KYC-free volumes increasing. True, volumes are still tiny compared to traditional exchanges  and big percentage changes can be caused by little absolute volumes, but here is the trends that matters.



It is worth noting that  LocalBitcoins Removes Cash-for-Crypto Trading Option. Hence it is not anymore possible to exchange BTC anonymously via LocalBitcoins.

Also worth noting that a Satoshi is more valuable than 7 fiat currencies:

https://twitter.com/Rhythmtrader/status/1144212374574051328

The smallest denomination of Bitcoin is now worth more than some national currencies.

0.00000001 BTC is worth more than 1:

Iranian Rial
Vietnamese Dong
Indonesian Rupiah
Guinean Franc
Sierra Leonean Leone
Laotian Kip
Uzbekistani Som

"Magic internet money" is now just "money".

Source: coin.dance

Last Hour Update:
The news that  gained much traction and was used to reinforce the idea as Bitcoin as last resort from Fiscal repression.
I do like the conveyed message, but the whole newswire is, put simply. Bullshit.
IF we go and see the relevant offer on Localbitcoins, linked here:



we see the little term of the trade:

Only open trade when you have access to Ecocash in Zimbabwe.
NOTE ***This trade is for RTGS dollars only***

As I said in one of my earlier posts:

The offer was about RTGS, the local currency officially pegged to USD 1:1, but apparently with an higher exchange. So probably the guy was trying to sell bitcoin and cash in a fiat shitcoin at a more devalued rate of around 6.8.
So to recap:
In Zimbabwe you can buy bitcoin selling USD@11,400
Or
You can buy bitcoins selling RTRS officially worth 1:1 with bitcoin, but in reality (read street market) a way more devalued 6.8 per USD.

Primer on RTGS:
https://www.bbc.com/news/world-africa-47361572

EDIT: Someone decided to set the record straight, with a superior (not a challenging task) piece of journalism:  No, Bitcoin Isn’t Really Selling for $76,000 in Zimbabwe: Analysts



Unique addresses number: BULLISH
Last month status: NEUTRAL
Time Horizon: Medium Term

RATIONALE: unique addresses is a loose measure of users in the ecosystem. True, many users could share the same address (like exchange addresses used by many users) or vice-versa each user could have many addresses (think about someone trying to entangle his addresses in order to gain some degrees of privacy).
Addresses numbers are also used in some kind of Bitcoin valuations involving Metcalfe’s law, or a law trying do determine the value of a network, users being the asset of such network.
 
COMMENT: Unique Bitcoin addresses continued their slow but steady growth raised during last month, almost touching 650,000 the maximum level since last year, just before the bull run. Chain activity picking up is a good sign, above all because , as we have seen, this only marginally reflected in a raise in fees. 



As we outlined last month, it's worth remembering that 600,000 active is a LOT of transactions when comparing to other cryptos.
For next month I am thinking about joining all this analysis on a comprehensive "Bitcoin Blockchain Health Check" section.

Source: https://www.blockchain.com/charts/n-unique-addresses?timespan=2years&daysAverageString=7




NVT:BULLISH
Previous month Status:NEUTRAL
Time Horizon: Medium Term

RATIONALE: Network Value to Transaction (NVT) is defined as the Bitcoin Network Value over the Daily Transaction Volume and be interpreted for Bitcoin in the same way P/E ratio for a stock-market. More insight and details on the interpretation of such signal can be found in the resource links at the end of the post.


COMMENT: NTV reversed his slide down, and pointing higher to a solid growth in market price. NTV Ratio is bullish over last month and @66, is above 40 signals a bottom on the market but still well away from dangerous bubble-detecting values. Both indicators signal an healthy price action for the moment, turning this indicator to BULLISH.





Realized Cap: BULLISH
Previous Month: NEUTRAL
Time Horizon: Medium Term

RATIONALE: The realised cap attempts to improve the market cap by valuing different part of the Bitcoin supply at different prices, instead of using the daily close as market cap does: every coin, or more properly every UTXO is valued at the price of their creation. In a less technically correct explanation let’s say that  while Market Cap use the last traded price and multiplies it times by the coins in circulation, Realised Cap computes  the total value paid for each coin at the price they last moved on the blockchain. You can look at this indicator as an improvement to the market capitalisation, a very misleading indicator for crypto currencies, trying to capture the “true hodling value” of Bitcoin.


COMMENT: Price action in last month drove realised cap again higher. Nothing spectacular here, but I guess It's an health consequence of higher bitcoin realised prices. Being market Cap still above realised cap we are still poised to a bullish environment. Upgrading to bullish.



MVRV: NEUTRAL
Previous month: NEUTRAL
Time Horizon: Medium Term

RATIONALE: MVRV (Market Value to Realised Value Ratio) is an indicator was designed by David Puell and Murad Mahmudov and is simply the ratio of Market Cap / Realised Cap. It’s useful for getting a sense of when the exchange traded price is below “fair value” and is also quite useful for spotting market tops and bottoms.
Awe and Wonder, later revised MVRV with a z-score, the resulting MVRV-z provides a clearer picture of the market cycle with tops and bottoms normalising around common levels. Refer to linked Woobull website for an in-depth explanation.



COMMENT: Market price movement last month made this indicator accelerate his rise from 1.75 to 2.50, and bodes well for further upside, as confirms other indicator signalling market is not approaching irrational exuberance. Price consolidation is a welcome opportunity to re evaluate scenarios before going further up in an healthy movement not driven (only) by FOMO.

For next month I am thinking about joining all this analysis on a comprehensive "Bitcoin Pricing Models" section.



USD Exchange Trade Volume: NEUTRAL
Previous month Status: NEUTRAL
Time Horizon: Medium Term

RATIONALE: Exchange traded futures are the closest instrument to Bitcoin Wall Street can touch to gain exposure to the cryptocurrency. Provided the price will follow quite closely the Bitcoin price, or what can be observed in the relevant “walled gardens” used to settle the futures, what is interesting for us is the contract volumes, that can give us a few hints of the interest Wall Street has towards the digital gold.

COMMENT: Overall traded volumes are on the rise since a few months:

 https://www.blockchain.com/charts/trade-volume?daysAverageString=7&timespan=2years



Bitcoin CME future volumes  (sum of all traded position) and Open Interests (net open positions on daily settlements) have experienced record after record during last month.  at CME, after CBOE settled last trade on his now defunct BTC future.

We have seen many reports of institutional investors flocking to Bitcoin:

• Genesis Capital: Institutional Activity in Crypto Up 300% in 12 Months
  
• PwC and Elwood publish first annual global crypto hedge fund report
  
• Bitcoin futures see growing institutional take-up
  
• Crypto Spring Has Arrived & Institutional Money Will Move In: Barry Silbert
  

The answer from exchanges has been slowed by regulators, that have been reluctant to provide markets with the much needed instruments they have been asking for.
Well, something is moving on that front:

• TD Ameritrade-Backed ErisX Gets Green Light to Settle Futures in Bitcoin
  

  The U.S. Commodity Futures Trading Commission (CFTC) has cleared the way for crypto derivatives provider ErisX to offer futures contracts with a new license approval Monday.
  
  ErisX, which is backed by U.S. brokerage TD Ameritrade, announced that the CFTC granted it a derivatives clearing organization (DCO) license, acting as a secondary approval on top of an existing designated contract market (DCM) license that the exchange already held. The approvals mean the company can now launch crypto futures products under the auspices of the U.S. regulator.
  

  
  
• Putting Bakkt’s Bitcoin Futures to the Test
  

  On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.
  

• CFTC Approves LedgerX to Settle Futures in Real Bitcoin
  

  The Commodity Futures Trading Commission (CFTC) has cleared bitcoin derivatives provider LedgerX to offer physically settled bitcoin futures contracts.
  
  The CFTC said Tuesday it had approved LedgerX’s application for a designated contract market (DCM) license, meaning the company can now offer the new futures contracts. LedgerX is the second company to receive approval to offer physically settled bitcoin futures; other firms, such as Intercontinental Exchange’s Bakkt, Seed CX and ErisX plan to enter this market.
  

Competition is heating up.



Exchange Scrutiny: BULLISH
Previous month Status: BULLISH
Time Horizon: Long Term

Rationale: exchanges are the weak link in the Bitcoin ecosystem: poor operations, subpar technologies, prone to frauds, scams and every kind of market rigging schemes (pump and dumps, market manipulations etc: basically every illicit operation banned in traditional financial markets since 20 years ago, to say the least). Every month news report of lost founds, hacked accounts, founder's frauds. Every news is a Darwin's push for the Bitcoin ecosystem toward a more efficient functioning.

COMMENT:Another busy month in the exchange world. Not only regulators are cracking down exchanges, with the already mentioned measures to enforce data sharing and compulsory KYC, but also general public is going to audit exchanges operations in order to protect their investments.
Cryptocompare Exchange Benchmark goes in this direction:
Why CryptoCompare Created an Exchange Benchmark

A growing body of research suggested that a substantial group of exchanges were inflating volumes by wash trading and implementing incentivised trading schemes in order to gain status.

The Exchange Benchmark and the resulting notion of ‘Trusted Volume’ is CryptoCompare’s response to the ‘Fake Volume’ problem. The report uses an innovative ranking methodology that utilises a combination of qualitative (due diligence) and quantitative (market quality based on order book and trades) metrics, without using volume directly in the ranking.

Exchange volume data, liquidity, and practices are not anymore taken for granted, but put under scrutiny. This is going to push for the better exchanges survival: this is meant to change the exchange landscape massively. This pressure means exchanges will face huge expenses to face regulatory pressure, and will have to keep their operations at the state of the art to gain trader's orders.
I see many of them exiting the competitive space in the coming months (this is good) and huge barriers being created for incumbents (this is bad).

First findings are that still 30% of volumes comes from "subpar" exchanges, leaving much room for improvements:

https://twitter.com/CryptoCompare/status/1140560727079628800?s=20

The inaugural CryptoCompare Exchange #Benchmark shows the market share of low quality exchanges increased by 30% in the past year, demonstrating the need for ranking methodology that doesn’t rely on aggregate volumes. #CryptoExchange #Cryptocurrency (link: https://www.cryptocompare.com/media/35650785/cryptocompare_exchange_benchmarking_2019_06.pdf) cryptocompare.com/media/35650785…

You can read the full report here: Exchange Benchmarking




HODL Waves: BULLISH
Previous month Status: BULLISH
Time Horizon: Long Term

RATIONALE: Bitcoin HODL Waves is a visualisation by Unchained Capital, it shows the cross section of Bitcoin held in wallets grouped by the age since they last moved. The upper contours, represent supply (old coins that have remained unmoved) while the lower contours represent new demand (coins that have recently shifted). The composite view clearly shows each bull cycle bringing in new demand. This visualisation is useful for locating exactly where the market timing is during its long term oscillations between bull and bear phases.
TL,DR: The area Above each line is the amount of "coins" not moved since the relevant time horizon.

COMMENT: Ops, something is changing! 12m lines flattened out, hence some hands moved from the #stonghands, to the #weakhands camp. This probably has to do with the MVRV chart: if you are a #weakhands once the price recovers and you are In the money with your trades you want to get rid of those coins you bought. This is a decision you are going to regret in a short period of time!



A new concept similar to Bitcoin HodlWaves is Bitcoin Dormancy. You can read more about this article Bitcoin
Average Dormancy.

In periods where long-term holders accumulate (HODL) Bitcoin, the average dormancy is low and the average age of UTXO increases, lowering the ratio. When long-term holders offload their holdings to short-term traders, the average dormancy increases and the average age of UTXO decreases, raising the ratio. This tool is therefore useful in identifying market trends that often lead to HODL waves detecting periods of bitcoin selling by long-term holders in bull markets, and then re-accumulation after the onset of the bear market when the UTXO average age begins to rise and dormancy once again drops.

This concept is not new, but i hope there will be some update on this, as it combines some interesting, yet not so immediate to understand indicators, combining them in a synthetic and informative way.



BONUS SECTION:
FACEBOOK LIBRA: BULLISH

The elephant in the room for this report has been the Libra announcement by Facebook.
A lot of commentaries has been done on this topic, religion wars have been fought, and still there's not a clear idea on the matter, also because the released material didn't provide all the details.

My basic comment can be summarised in the following bullet points:

• Libra is not a cryptocurrency: it is not because lacks one of the 5 pillars of a cryptocurency: Decentralisation. Libra is something different, I would say it is not a FIAT currency, nor a Cryptocurrency. Which extreme will lean towards has yet to be determined, and this is only in the hands of Facebook.
  
• Libra is not in competition with Bitcoin: Bitcoin is digital gold and allows personal financial Sovereignty. Libra wants to be a super effective centralised Mean of Payments. Libra is in competition with traditional banking and credit cards, as pointed out by Bitmex CEO  Arthur Hayes, in this interview Facebook’s Libra Will Benefit Bitcoin But ‘Destroy’ Banks, Says Industry .
  In a sense, LIBRA is in competition with Lightning Network. Again, best user experience will lead to success.
  
• Libra is a game changer for Central Banks. Central banks have been quite vocal at the releases of Libra details. This is a reaction dictated by fear. Money has been the main control instrument of Central States over the population and the main leverage for fiscal stimulus. This critical tools cannot be handed out to a private corporation (all this is their opinion, not mine). Facebook has been ordered to top developing Libra and Zuckerberg has been immediately summoned to appear in front of Congress.
  
• Long term Target of Libra is the “Un-dollarization of the world”: libra would be backed by a basket of FIAT currencies, USD, EUR, GBP and YEN to start, hence the scope is global adoption lessening the need of a world-based unit of account or mean of payments: this means reducing the role played by the dollar as we intend today. This is YUGE and fits with the turmoil by central bankster. To me this is the central key aspect of the whole libra thing. Nothing short of this would be irrelevant. 
  
• Long term Effect of Libra on Bitcoin is positive: I could spend a lot of words here, but I will quote Caitling Long, who wrote What Facebook's Cryptocurrency Means: 6 Predictions: a a well written piece, I second 100%. On the sixth bullet point in particular she states what I tought is the long term arc for Libra in relation to Bitcoin:
  

  Facebook’s cryptocurrency will turn out, in the end, to be a Trojan horse that benefits bitcoin.
  Here’s my biggest prediction: Facebook’s foray into cryptocurrency will end up benefiting bitcoin. It will take time, but Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason—bitcoin is scarce, while Facebook’s cryptocurrency is not. People will migrate over time to the most honest ledger for storing their hard-earned wealth—and that’s not fiat currencies or derivatives thereof, including Facebook’s cryptocurrency.
  
  This phenomenon actually happened in Venezuela, as early bitcoiner Nick Spanos recently pointed out to me. When the Maduro regime introduced the ill-fated petro cryptocurrency, the government made a concerted effort to educate Venezuelans about cryptocurrencies—and it correlated to a spike in bitcoin use by Venezuelans.
  
  Facebook’s foray into cryptocurrency will likely end up being a beneficial detour on the path to broader bitcoin adoption. Bring it on!
  

  
  
• Regulatory Clarity: as stated by Longhash  How Facebook's Cryptocurrency Could Help Bitcoin Adoption Libra will force regulators to adobpt a common, global stance on cryptocurrencies. The stake is too high to let it unruled, or with discrepancies between regulations.
  
  

  Facebook's cryptocurrency should give the broader digital asset space some much-needed regulatory clarity. At present, governments across the globe generally don’t agree on what to do with Bitcoin or cryptocurrency in general. In the United States, regulatory attitudes toward cryptocurrency vary by state.
  If Facebook makes cryptocurrency more mainstream, lawmakers will be forced to better understand the sector. This could lead to governments around the world establishing a proper framework for cryptocurrency companies and users. This is unlikely to eliminate all the friction in the crypto regulatory sphere, like the SEC's hesitation to approve a Bitcoin ETF, but could help establish some basic rules.
  Regulatory uncertainty is not good for innovation. It can prevent industry leaders from entering certain jurisdictions. Proper guidelines can pave the way for traditional banks to get involved, as well as entice more venture capital firms and consumers to invest.
  

  
  

Others Read:

• Website: https://calibra.com/
  
• White paper: https://libra.org/en-US/white-paper/
• Github repository: https://github.com/libra
  
• Libra currently looks more like a fiat currency than a cryptocurrency
  
• Libra, a Cyberpunk Nightmare in the Midst of Crypto Spring
  
• How Will Facebook’s Libra “Blockchain” Really Work?An expert guide to the social media company’s foray into cryptocurrency By Jameson Loop
  
• An in-depth review of Facebook's long-anticipated entry into cryptocurrency
  

A few interesting reports:

• A Note on the Bitcoin Rally
  
• JUN 19 - BTC Mining Report by Coinshares
  

  In this report we investigate the geographical distribution, composition, efficiency, electricity consumption and electricity sources of the Bitcoin mining network.
  

  
  
• Bitcoin is likely to hit $100,000 by 12/31/2021
  

Bitcoin Models reference list:

• Introducing NVT Ratio (Bitcoin's PE Ratio), use it to detect bubbles
  
• When did Bitcoin's investment era begin? A study using NVT.
  
• Realized Cap
  
• MVRV
  
• CME future
  
• https://bitcoinvisuals.com/lightning
  

As usual I would like to thanks everyone who contributed to this post, in particular the guys in the Bitcoin Pump! thread on the Italian board for invaluable exchange of ideas and help in keeping track of news, as well as the whole WO's family for moral support and entertainment.

What are your thoughts?

[babo]

suberb analysis
thank you so much for this precise and accurate report

i hope in a rain of merits for this amazing report

[fillippone]

suberb analysis
thank you so much for this precise and accurate report

i hope in a rain of merits for this amazing report

Thanks!
I wish I knew a merit source!

[RejectedBanana]

suberb analysis
thank you so much for this precise and accurate report

i hope in a rain of merits for this amazing report

Thanks!
I wish I knew a merit source!

Haha, you've already got Hero merit, all you need now is a hundred twenty memes and shitposts!

[redsn0w]

...
What are your thoughts?

Daaaamn  , +3 merits !

[bettercrypto]

It will be flat until September comes. Be positive! Bitcoin halving will push bitcoin to move up. A lot of people are speculating it to increase and beat its ATH this 2019 due to the fact that bitcoin mining will be halved by May 2020. If you will just look the support level, it is really hard to break the 9k supports. In addition, whales are awake in this year. There are many whales at binance who bought hundreds of bitcoin back when there was momentum from 9k to 13k dollars. That is a good sign that bitcoin will continuously move up.

[fillippone]

It will be flat until September comes. Be positive! Bitcoin halving will push bitcoin to move up. A lot of people are speculating it to increase and beat its ATH this 2019 due to the fact that bitcoin mining will be halved by May 2020. If you will just look the support level, it is really hard to break the 9k supports. In addition, whales are awake in this year. There are many whales at binance who bought hundreds of bitcoin back when there was momentum from 9k to 13k dollars. That is a good sign that bitcoin will continuously move up.

As you can see in the summary, I have never been so positive since I have been writing this repot

[mirawantirinjana]

entering July this price falls, it seems like it will be difficult to recover in a short time.
maybe even the price will continue to decline
or maybe this is also the beginning of bitcoin returning to fly higher than before.

[kronos123]

As usual I would like to thanks everyone who contributed to this post, in particular the guys in the Bitcoin Pump! thread on the Italian board for invaluable exchange of ideas and help in keeping track of news, as well as the whole WO's family for moral support and entertainment.

What are your thoughts?

Excellent analysis and summary Fillippone, as always fixed note 

Personally, I don't expect a new max for this whole summer, with the price recovery in November for the year-end rally; Bitcoin has stopped on the 68.2% Fibonacci retracement, and I believe it will now take a while.

[b3llsf1l3s]

1 trillion marketcap is still low, gold has a 7 trillion marketcap and that is mainly from store of value.  The world is moving to a digital world and gold is a hassle to transport globally while bitcoin just requires a few clicks of the mouse.

Yes you are right, but even with the ease like this, this is what causes the volalitle of bitcoin to be higher, so it will be difficult to predict even in the next 1 week. We have seen through the market that Bitcoin going to bullish in just 1 - 2 week and then whole market got bearish just in 1 day.

[rattle_rattle]

1 trillion marketcap is still low, gold has a 7 trillion marketcap and that is mainly from store of value.  The world is moving to a digital world and gold is a hassle to transport globally while bitcoin just requires a few clicks of the mouse.

Yes you are right, but even with the ease like this, this is what causes the volalitle of bitcoin to be higher, so it will be difficult to predict even in the next 1 week. We have seen through the market that Bitcoin going to bullish in just 1 - 2 week and then whole market got bearish just in 1 day.

As usual great work Fillippone! Lucky us you don’t get tired writing these analysis!

[guoyu78]

entering July this price falls, it seems like it will be difficult to recover in a short time.
maybe even the price will continue to decline
or maybe this is also the beginning of bitcoin returning to fly higher than before.

Nah, we should not tie this current decline to the Month, the month has just started and we still have more and more investors to purchase more coins. Bitcoin believers or investors already know that we are in uptrend and whatever decline they see now will be solely attributed to correction and not because the market has started heading towards bear market again.

This correction is what usually prompt some traders and investor to buy more of bitcoin, because they see it as another opportunity to buy at cheaper price. It will not be too long for us to see it rebound back to the last value it touched before heading back downward. This July would sure bring its own surprise too and I am sure we will definitely get to the value we have never gotten to before the end of the month.

[stellgod]

Some people are saying that gold is a hassle to transfer globally. Well. You all just forgot that you don’t really need to transfer gold physically, not when there are companies that handles that, just like GoldMoney. This is a company that stores gold for people and you’re able to access it through your account online and whenever you need it physical they can also ship it to you… but that’s not necessary since they do work of storing it for you. But anyway… cryptocurrency is good, but they are different from gold, cause they are electronic and doesn’t have physical forms.

[fillippone]

Some people are saying that gold is a hassle to transfer globally. Well. You all just forgot that you don’t really need to transfer gold physically, not when there are companies that handles that, just like GoldMoney. This is a company that stores gold for people and you’re able to access it through your account online and whenever you need it physical they can also ship it to you… but that’s not necessary since they do work of storing it for you. But anyway… cryptocurrency is good, but they are different from gold, cause they are electronic and doesn’t have physical forms.

Not your Vault,
not your Gold.
Ask Bundesbank what happened when they asked FED just to see their gold.
Not to mention how long it took (spoler alert: many years) to have it back in Deutchland.
Same thing with Maduro and Bank of England.
SO in your case. What happens if government seizes your gold@GoldMoney?

[d5000]

A comment to the "transaction number" indicator:

I think in this indicator we have reached already a level where further growth is not longer easy, because the nearer we get to the "theoretical maximum" level, fees rise much faster, which acts like a blocker. Most days of the week, the blockchain is so full and fees are so high that it makes sense to bundle lower-value transactions you would have sent separately before, or for example buy several items at once (I for example use BTC to pay services like web hosting, and currently it's better to pay several months in advance). Thus, this indicator in my opinion can - at the current "blockchain usage level" - only be a negative indicator for the timeframes when there is less activity than usually (which currently isn't the case).

On a whole I agree with the June analysis, however, LN for me - for this current bubble / short-to-midterm price movement - may be too early to be a "bullish" component. I would currently see it as "neutral", seeing the stagnating adoption numbers (the slow node/channel number growth is actually the most important indicator imo, not the value in BTC). It is, however, obviously a long-term bullish "asset", but I think it will see adoption only after the next bearish intermezzo.

[fillippone]

A comment to the "transaction number" indicator:

I think in this indicator we have reached already a level where further growth is not longer easy, because the nearer we get to the "theoretical maximum" level, fees rise much faster, which acts like a blocker. Most days of the week, the blockchain is so full and fees are so high that it makes sense to bundle lower-value transactions you would have sent separately before, or for example buy several items at once (I for example use BTC to pay services like web hosting, and currently it's better to pay several months in advance). Thus, this indicator in my opinion can - at the current "blockchain usage level" - only be a negative indicator for the timeframes when there is less activity than usually (which currently isn't the case).

On a whole I agree with the June analysis, however, LN for me - for this current bubble / short-to-midterm price movement - may be too early to be a "bullish" component. I would currently see it as "neutral", seeing the stagnating adoption numbers (the slow node/channel number growth is actually the most important indicator imo, not the value in BTC). It is, however, obviously a long-term bullish "asset", but I think it will see adoption only after the next bearish intermezzo.

Very nicely put points.
Thank you very much for your inputs.
True, transaction is capped, but as I wrote transaction numbers, hashpower and fees don't add up. I am probably missing something. On-chain transactions are not running at full steam btw.

Point taken on the LN.

[exstasie]

I voted "flat" for the end of July but I think we could see lower prices in the short term.

A comment to the "transaction number" indicator:

I think in this indicator we have reached already a level where further growth is not longer easy, because the nearer we get to the "theoretical maximum" level, fees rise much faster, which acts like a blocker.

Not only do rising fees discourage some transactions (especially lower value ones) but they pressure users and services to optimize their network usage. Transaction batching, as one example, can drastically lower overall volumes while increasing the average value of transactions.

Network metrics like this are really complex and opaque. I don't like to read into them too deeply for fundamental analysis, but this is still some pretty interesting work from the OP nonetheless.