Thank you for attending the lecture in Steemit-Crypto-Academy Season 4 & doing the homework task-1

I will be explaining the Bull Cycle of December 2018 to April 2021. As you can see on the above chart the HODl is at the peak of $19k and this is the time period when the BTC created its bottom around 3200 USDT. After this huge accumulation, the bull cycle started and the price of bitcoin made high of 64k USDT in the month of April.

That s the price action that you are saying. We are more interested in your analysis into HODL wave. How does that HODL wave, coin-age in translating into bullish price action in a Bull cycle??

If a transaction is made today, and since today if it does not move for the next two years then the age of the coin will be 2 yrs, the more it ages the more it moves towards the upper band of the chart, in other words, it gets separated from the temporary noise/spikes(daily/weekly transactions) over the course of time. Such UTXOs contribute to the HODL wave.

So before a bull-cycle there will be visible pattern of the lower band aging into the uppwe brand and the upper band is getting thicker thicker, signifying that the larger audience is in favor to hold the coin for the long term. So in such a scenario, for any given demand, the supply is getting lower, so the price should go up to balance the supply/demand equation.

This is not necessary that if the price is increasing then the number of active addresses increasing because the price of the asset depends upon various factor like Market sentiments, teamwork engagement etc.

Nos of Active addresses always signify adoption rate. So better adoption rate is always bullish for the asset in the long run. In UTXO accounting structures, no of active address has always supported bullish price development.

It helps us to understand the real value of the asset as it tells us whether the users are using the Network or not

It tells us the network worth wrt transaction volume/activity. A higher NVT signifies overvalued asset and vice versa.

Exchange Flow is an aggregator that can help us to get alert some such activities performed on the exchange.

How do you calculate it??

Exchange Flow Balance= Exchange Inflow- Exchange Outflow

So a positive number will signify a sell signal whereas a negative number will signify a buy signal.

Downward spikes(or negative Exchange Flow balance) supported bullish price development in BTC in the recent rally from 4k to 64k.

On-Chain metrics data are helpful very helpful especially in Medium and long-term investment

On-chain metrics are more useful in the long term as compared to short/medium term. It also varies from one asset to the other depending on the accounting model and type of network.

Here is another example when the Outflow is huge still the price of BTC is declining which is a false signal.

In that case, you should always use net flow(inflow-outflow) to correctly predict the trend.

Observation/Suggestion/Feedback:-

• The author has demonstrated & analyzed the on-chain metrics wrt price action of BTC and LTC both in the short term and long term.
• The author has used Santiment to analyze the price trend in BTC wrt various onchain-metrics. However, the user fails to explain HODL wave properly.
• It would be better if you create a model of numerical data(from the chart) and do a bit more in the analysis part.
• Better quality of analysis is needed to portray a comprehensive understanding of the subject.
• One round of proof-reading is required.
• Better formatting is needed to render a professional touch. Leave more white spaces between two paragraphs.

Thank you.

Homework Task -1 successfully accomplished
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