Quant: Bitcoin Indicators Now Look Similar To Q4 2020, Big Move Ahead?

Keshav Verma

1 year ago

3 mins read

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Quant says some Bitcoin indicators show the same trend as in during Q4 2020, suggesting that BTC could make a similar move up.

Bitcoin Netflow And Stablecoins Supply Ratio Trends Look Similar To Q4 2020

As explained by an analyst in a CryptoQuant post, two BTC indicators: the netflow and the stablecoins supply ratio, are both trending similarly to how they did during the last quarter of 2020.

The Bitcoin netflow indicator shows the net number of coins entering or exiting exchanges. Its value is calculated by taking the difference between the outflows and the inflows.

When the metric observes positive values, it means exchanges are experiencing more inflows than the outflows, and so more investors have started sending their BTC to exchanges for selling purposes.

Similarly, negative values imply just the opposite; investors are withdrawing their Bitcoin from exchanges either to hodl in personal wallets or to sell them through OTC deals.

The other metric of relevance is the stablecoins supply ratio, which is defined as the market cap of BTC divided by the market cap of all stablecoins.

When the indicator’s values are on the lower end, it means there is an abundance of stablecoins supply in the market. High supplies can imply a potentially bullish sentiment among the market as investors use these coins for picking up other crypto like BTC.

On the other hand, higher values of the ratio indicate a low supply of stablecoins, which implies a lack of buying pressure in the market. This could lead to a potentially bearish trend or sideways movement for BTC.

Now, here is a chart showing the trend of these two Bitcoin indicators vs the price:

The similarity between Q4 2020 and the current period | Source: CryptoQuant

As the above chart shows, the netflows seem to have been negative for a while now and the stablecoins supply ratio is also assuming low values.

This trend looks to be similar to how it was during Q4 2020. What followed it was a big bull rally, and so the quant believes we may see BTC blow up similarly soon.

BTC Price

At the time of writing, Bitcoin’s price floats around $43k, down 2% in the last seven days. Over the past month, the crypto has lost 9% in value.

Over the last few days, BTC has only shown sideways movement as the crypto fails to make a move above $45k. The below chart shows the trend in the price of the coin over the last five days:

BTC's price continues to consolidate between the $40k and $45k levels | Source: BTCUSD on TradingView

Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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