Chain Gang 7/10

Adam Gotelli
3 min readJul 10, 2021


This week’s price action for Bitcoin was non-volatile by Bitcoin’s standards. With a weekly high of nearly 36k and a low of well over 32k, it was a fairly uneventful week price-wise. BTC is now approaching 2 months of trading roughly in the same range. This week's technicals showed that price action is beginning to tighten (hence the lack of volatility). When looking at price charts, timeframe candlesticks are continuing to decrease in size. This means that a major increase in price, or break to the downside is becoming even more likely. If there is one thing to learn from BTC, it’s that the asset’s price generally does not move in the direction that retail investors expect it to. Now let’s take a look at this week’s on-chain metrics.

The number of new users coming on to the Bitcoin network reached an all-time high this past week. These users are defined as “entities” in the chart below. The Entities Net Growth comes as somewhat of a surprise considering the lack of positive news coverage the asset has received over the past few months. Nonetheless, 50,000 new users joined the network each day. One note regarding this chart is that user growth has never acted in such a way immediately before a bear market. This does not guarantee that we are in a bull market, but it is a factor to consider.

As noted in previous articles, long-term BTC holders have been accumulating more BTC as the price has been ranging. Whether it be a retail investor with a small supply of BTC or a large-scale corporation, long-term holders have been taking advantage of on-sale BTC. This past week, the whales created an extremely sharp uptick in Supply Held By Entities With Balances Between 1k-10k. Collectively, their holdings increased by 65,429 BTC.

Several weeks ago we touched on bearish signals from the Miner Net Position Change metric. This showed that miners were selling their coins after mining them, rather than keeping them on their balance sheets. This may have meant that miners believed dollars would be more valuable than BTC in the immediate future. This tendency did not hold enough weight to significantly affect the price of BTC. Over the past week, we saw a return to positive levels, with miners holding on to a significant amount of coins they mined.

Another rough week for the S2F (stock-to-flow)Model. Deflection from the chart is the highest it has ever been. The model shows that the price should currently be around $78k. Bitcoin has hardly touched half of that price over the past 7 weeks. Things are looking bleak for a model that has been referenced so heavily for much of BTC’s past.

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