Daily Trade Ideas & Trends


10 May 2020

Doc's Daily Commentary

4/29 ReadySetLive with Doc and Mav

Checkmate's Corner


After the halving, we can expect some volatility. Outside of supply and demand imbalance and technological/infrastructure developments, the halving is pretty much the only hard-coded news story for Bitcoin. The next one is four years away.

Last week we looked at some potential scenarios for Bitcoin price action and what history has suggested will happen. Our conclusion was that we will likely see 20-40% of hash-rate drop off the network and price is likely to remain sideways and volatile.

This week, I wanted to review a number of metrics that are worth keeping an eye on to help construct a picture of what may be going on behind the scenes for those looking to trade the volatility.

Now remember, on-chain metrics are generally slower but higher conviction signals. They should be used as a tool to support your larger time frame bias, not so much for intraday swings.

Psychology matters

Given the macro environment is somewhat hairy, what really matters is two things, HODLer confidence and new demand.

On the supply side, sell pressure comes from miners, weak hands and exchanges liquidating fees for fiat.

On the demand side, we have HODLers with strong conviction and weak hands who have only just entered the market. Note how weak hands are on both sides of the equation as they have not undergone the tortuous process of a bear market yet. They will, but they will get shaken out many times before then.

And then we have our favourite volatility inducing firework – uber-leveraged traders. They will get squeezed on both long and short positions and the open interest is a metric to watch closely.

Sell-Side dynamics

The most obvious sell-side pressure is from miners. A great article was published back in 2019 which actually drew the conclusion that mining sell-side pressure is only 5% to 10% of flow into exchanges.


We can also review Bytetree which presents this nifty chart showing the number of BTC mined (blue) compared to the number of freshly mined BTC which were ‘first spent’ (yellow).


What we can see is that since May 4, generally, less BTC was ‘spent’ than was mined, suggesting miners were holding onto their coins until higher prices. That is until May 10 where First spend jumped up to equal the current issuance, and we also see increased sell pressure and a pullback has followed. My read on this is miners saw the 10k price, and took their opportunity to realise the higher prices in anticipation of a post-halving consolidation.

Willy Woo makes an interesting point in this tweet, that post-halving, miners will actually no longer be the dominant sell side pressure. As the daily issued coins drops from 1800 to 900BTC/day, the economics show that exchanges will account for the major seller as they recuperate costs into fiat currency. Like miners, their costs are usually denominated in USD for exchange infrastructure, salaries etc.


What is important to note about this dynamic is that exchanges will be sellers at all times, they have no reduction as bitcoin issuance drops and in fact will likely see increased fees as trading and price increases. The more people trade, the greater the sell pressure, both to the upside and downside. In fact, exchanges will exacerbate volatility, especially in bear markets where sell side pressure already overwhelms the buy-side.

The sell pressure from exchanges is hard to track with any certainty however we can consider a few input parameters in building our thesis.

Looking at data from Skew on open interest on derivatives exchanges, we can see that a significant growth in position size has occurred in the last few weeks. Remember that even on a leveraged exchange, fees are charged based on position size, so even if you only have 10% of the capital in your account, you pay fees on 100% of the position.

This suggests that exchange side sell pressure is likely to increase in the short term also, coupled with the likelihood of a short or long squeeze depending on which side of the order-book is over-leveraged.


If we finally consider Willy’s numbers above of 900BTC from miners and 1200BTC from Exchanges per day post-halving, we can compare that sell pressure to the daily real volume from Messari.

At a price of $8500 for BTC, Miners contribute $7.65M and exchanges contribute $10.2M worth of sell pressure per day. Combined, these two sell side parties equate to 0.5% of the total daily volume…Almost nothing. People buying and selling as traders contribute the remaining 99.5% of the exchange volume.

We’ll finish up with part 2 tomorrow! 

The ReadySetCrypto "Three Token Pillars" Community Portfolio (V3)


Add your vote to the V3 Portfolio (Phase 3) by clicking here.

View V3 Portfolio (Phase 2) by clicking here.

View V3 Portfolio (Phase 1) by clicking here.

Read the V3 Portfolio guide by clicking here.

What is the goal of this portfolio?

The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

CryptoCurreny – Security Tokens (STO) – Decentralized Finance (DeFi)

With this portfolio, we will identify and take advantage of the opportunities within the Three
Pillars of ReadySetCrypto. We aim to Capitalise on the collective knowledge and experience of the RSC
community & build model portfolios containing the premier companies and projects
in the industry and manage risk allocation suitable for as many people as

The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

Our Current Allocation As Of Phase Three:

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The ReadySetCrypto "Top Ten Crypto" Community Portfolio (V4)


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What is the goal of this portfolio? 

The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.
This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.
To give an update on the position, each one listed in low to high relative risk:
SoV/money == BTC, DCR
Platforms == ETH, XTZ
Private Money == XMR / ZEC / ZEN
DeFi == MKR / SNX and stablecoins
It is the most realistic way for us to distill the entirety of what we have learned (and that includes the RSC community opinion). We have an array of articles that have gradually picked off one by one different projects, some of which end up being many thousands of words to come to this conclusion. It is not capitulation because we all remain in the market. It is simply a consolidation of quality. We seek the cream of the crop as the milk turns sour on aggregate.

Current Top 10 Rankings:



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