‘Selling Pressure Exhausted, Accumulation Has Begun’ Report Delphi Digital Research

Colin Muller

“Selling pressure [on Bitcoin] from long term holders [...] is almost exhausted,” said Delphi Digital in their most recent report entitled Bitcoin Holder Analysis Through Cycles.

The NYC-based crypto research firm have updated a recent (December) analysis of Unspent Transaction Outputs (or UTXOs) - among other data - on the Bitcoin network over time. Based on that analysis, Delphi predicted that a bottom to the 2018 bear market would probably come in Q1 2019, or at the latest during H1.

Delphi are doubling down on their earlier assessments, again stating that their UTXO analysis “results in a cluster of dates that indicate a bottom in Q1 2019.” They go on to add that the Bakkt and Fidelity products, which should both come online in Q1 2019, should ensure an end to declining prices in the yearlong cryptoasset market correction.

UTXO?

Delphi’s method of UTXO (again, referring to unspent transactions, which can be measured thanks to Bitcoin’s pseudo-anonymous character) analysis essentially measures how long bitcoins have been dormant.

utxo1.png(source: delphidigital.io)

Delphi surmise that the longer a coin has been dormant and unmoved the less likely it is that the coin’s owner will sell it - the owner has become a holder. The research group have applied this principle to the entire UTXO pool across bitcoin’s entire history, and derived a patterned relationship between the age of the UTXO pool and the asset’s price.

utxo2.png(source: delphidigital.io)

They observe that the UTXO pool reaches its maximum overall age - it is least volatile - during the starts of uptrends; obversely, they observe that the pool reaches its minimum age - it is most volatile - after price peaks and during bubble-pops. They find that the UTXO pool is now ageing, and in accordance with historical example consider it to be a period of accumulation.

Other Opinions

CryptoGlobe reported today on less rosy predictions for the bitcoin markets. MarketWatch’s Jesse Colombo says that a triangle chart pattern is forming that will “likely make another big move” after it completes. Colombo fears that an unfavorable move could take bitcoin under $2,000, wiping out virtually all of 2017’s gains.

utxo3.png(source: TradingView.com)