A small crypto analysis group Delphi Digital has conducted thorough research on the trends, transaction, and behavior of bitcoin in the one-year time frame. The deep and extensive research throws light on the behavior of bitcoin in the coming days of Q1 in 2019.
There were different parameters on which the research is based on, and the results are not overwhelming. The analysis suggests that bitcoin would see new lows of the market in its first quarter of 2019. The study is based on the transaction activities derived from two different methods. Let us look into each parameter separately to understand the analysis better.
Unspent Transaction Outputs (UTXO)
The first method of use was to compare the market cycles against the cycles of Unspent Transaction Output (UTXO). The research team measured the percentage of UTXO that has been inactive for over a year and then compared it with the market movement. The higher general age as an outcome is a result of fewer bitcoin transfers and lower activity whereas a smaller age gap suggests increased transfers and more action.
The research showed that the period of lower activities and transfers corresponded with falling prices, market bottoms and Bitcoin holdings. While a rise in the price showed considerable activity and transfers along with less accumulation. The below graph highlight the point clearer.
The UTXO data also suggests that the current UTXO is ageing and showing trends of accumulation from the BTC holders, which might indicate a new bottom for Bitcoin in the first quarter of 2019.
Network Value/Transaction Signal
The next metric for the choice of comparison is Network Value/Transaction Signa (NVTS). This parameter of comparison is a more objectively measurable value rather than the market movements and predictions. The setting compares the price of the coin with on-chain transaction value. It is a more refined version of transaction volume moving-average indicator.
The result of the NVTS analysis falls in line with that of the UTXO results and shows that the bottom may arrive sooner than what many are thinking. The Delphi reports notes that calculating transaction volumes will always be a guessing game rather than an exact proof.
Apart from these two methodologies which strictly focus on price and trade side, Delphi researched upon long-term value analysis on various metrics and focusing on a more real-life use case like mode of exchange. Delphi also noted that if Bitcoin can get past its current hurdles like volatility in the trade market, Regulatory issues and improve upon its rate of transactions, bitcoin can see itself as a noted and stable form of investment.
An excerpt from the report
“over the long run, we foresee bitcoin serving as a staple allocation in traditional investment portfolios, central bank reserves, and as a suitable alternative for a portion of assets held in offshore accounts.”
The extensive analysis conducted by Delphi on various metrics along with the trade market data, the research looks promising and thorough. Bitcoin and other Altcoins must asses on the study and put on their thinking caps. The core team of developers along with its partners must look into the areas that can be made robust and work upon it.
Other research firms must take inspiration to conduct more such broad spectrum analysis to give a more clear result.
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