A little bit confused though. During the May crash into the summer of 2021, "Dry Powder Ratio" kept increasing, yet illiquid supply was trending downwards.
Here's my thesis, correct me if am wrong.
Folks were selling and converting into stables, not necessarily withdrawing out of exchanges. Only when there was a divergence between price and illiquid supply, then a decline in dry powder did price start trending upwards.
From the charts, rising stables on exchanges has sent prices lower, and vice versa.
Maybe we could get a metric, to make up for the "gray area" as we don't know if stables on exchanges are folks selling (converting to stables) or dry powder ready to be deployed (depositing into exchanges).
Let's say you combine Illiquid supply + Dry Powder Ratio.
- Where declining Illiquid supply and rising Dry Powder Ratio means folks are selling (converting into stables)
- Rising Illiquid supply and rising Dry Powder Ratio (are dry powder ready to be deployed).
- Rising Illiquid and falling Dry Powder Ratio (dry powder has been deployed).
👍Good job Will, love the "Dry Powder Ratio"
A little bit confused though. During the May crash into the summer of 2021, "Dry Powder Ratio" kept increasing, yet illiquid supply was trending downwards.
Here's my thesis, correct me if am wrong.
Folks were selling and converting into stables, not necessarily withdrawing out of exchanges. Only when there was a divergence between price and illiquid supply, then a decline in dry powder did price start trending upwards.
From the charts, rising stables on exchanges has sent prices lower, and vice versa.
Maybe we could get a metric, to make up for the "gray area" as we don't know if stables on exchanges are folks selling (converting to stables) or dry powder ready to be deployed (depositing into exchanges).
Let's say you combine Illiquid supply + Dry Powder Ratio.
- Where declining Illiquid supply and rising Dry Powder Ratio means folks are selling (converting into stables)
- Rising Illiquid supply and rising Dry Powder Ratio (are dry powder ready to be deployed).
- Rising Illiquid and falling Dry Powder Ratio (dry powder has been deployed).
Would love to see this metric. Thanks.
Take it easy man.
"A record 76.5% of supply hasn’t moved in at least 6 months, 76% of supply is held by entities with low tendency to sell"
God, I love Bitcoin!