Big Idea

Accumulation and hashrate continue to climb despite the price lull of August. While many are calling for a top, my indicators suggest we are still in accumulation territory.

Key Metrics

Exchange Reserves falls further: 2,508,641

Note: There was an adjustment to the underlying counting mechanism updating the exchange reserves upward across history.

Last month’s exchange reserves were measured at 2,527,000 showing a decrease of exchange reserves of ~19,000 BTC or ~$2B equivalent of BTC pulled into cold storage.

This new all time low signals that demand is pulling Bitcoin off of the exchanges into cold storage and are not short term traders.

Copper / Gold Ratio hits new bottom

July saw one of the biggest drops in Copper/ Gold as Gold prices spiked strongly. As investors continue to buy gold, we’re seeing the ratio hit pandemic levels. This suggests that we are still in a “risk-off” environment.

The Copper/Gold ratio is a key macro indicator for industrial manufacturing optimism and growth as copper is a heavily used industrial commodity. When the Copper/Gold ratio is low, it means Gold price is increasing relative to gold, indicating investors are risk off and saving more. When copper price increases relative to gold, it signals additional manufacturing & industrial demand and growth optimism.

Bitcoin Realized Price continues upward: $52,682

August realized price hits $52,682 from a previous high of $51.1k. Bitcoin realized price is the average price that each coin last moved at on the network. This value tends to set the floor and mirrors the 200wma, but indicates Bitcoin holders willingness to move and spend Bitcoin.

Bitcoin realized price has also signaled previous peaks when the realized price reaches peak price of previous cycle. For this cycle, realized price would need to reach ~$69k to signal the peak of the last cycle.

August Global Liquidity Expands by another ~$0.5T

After re-adjustment from a previous metrics, we’re going to use Global Liquidity which has reached ~$109.5T from July of ~$109T. This highlights the continued increase in the global liquidity in the market.

This below graph shows M2 money supply shifted 12 weeks with a Bitcoin correlation of >0.9.

Bitcoin Relative Strength Index (RSI) decreases by 6 points

July RSI is ending at 67 from 73 with an decrease of ~3 points which correlates with the recent BTC / USD price decline. This decrease in RSI highlights continued consolidation, though anything over 50 is still considered “bull” market territory.

The Bitcoin Network Hashrate breaks the 1 zettahash per second milestone.

In August, Network Hashrate hit a new all time high of just over 1 zettahash per second at 1.001 zettahash (1 Billion TerraHash). To put that into perspective, that’s more compute power than Facebook, Amazon, Google, Tesla, and Microsoft combined.

Bitcoin ETFs saw a modest $750M net outflow for August.

This modest outflow corresponds with the price correction, but compared to last months $5B in inflows and continued exchange reserve draw down, we know this Bitcoin draw down is short term.

New Metric: Public Company Bitcoin Holdings, August ending at 999,666 BTC.

Public companies have begun to strategically acquire Bitcoin and put it on their balance sheet. This is a relatively new segment of Bitcoin demand that is growing extremely quickly.

That’s all for now.

If there are additional metrics that you want to see or think are appropriate to include, please let me know.

Thanks for reading.