Bitcoin: Terminal Price

hey everyone thanks for jumping back into the cryptoverse today we're going to talk about Bitcoin and we're going to be discussing the terminal price if you guys like the content make sure you subscribe to the channel give the video a thumbs up and check out the sale on into the cryptoverse premium add into the cryptoverse docomo ahead and jump in so before we talk too much about the indicator and defining what it means as always we have to give credit where credit is due it's an important thing to do when you're talking about an indicator

especially one that is not yours this indicator was created by cchm and David PE in November of 2021 it appears so what I'd like to do is before we really get into this we got to Define everything so really this indicator is a couple of different ones right it's the terminal price and the balance price now the terminal price has been useful for helping to identify tops the balance price has been useful for helping to identify bottoms right Bitcoin normally bottoms out around the balance price and it normally tops out around the terminal price so

the terminal price is kind of difficult to understand if you haven't looked at some of these terms before but we're going to try to Define it and we're going to go one step at a time so we first must understand a concept called transferred price now the transferred and these these we're s going to have definitions nested within definitions but the transferred price is just simply equal to the cumulative value days destroyed divided by the market age times Supply now value days destroyed is defined as price times coin days destroyed clear as mud right but

we can actually go Define coin days destroyed right so coin days destroyed is another indicator and one of the things about coin days destroyed is that you will see major spikes around pretty volatile moments in the cryptoverse right you got a ma you get major spikes at at tops and at bottoms we also got a major spike at the midcycle top last cycle we got a major spike at the midcycle top this cycle so coin days destroyed and of itself is an interesting indicator but it's defined as the sum of all Native units transferred that

day multiplied by the amount of money or the amount of days since those native units were last transferred so for instance if you have five Bitcoin in a wallet for 20 days then 100 coin days are created so when those coins are spent then you have 100 coin days destroyed so remember transferred price is equal to Value days destroyed which is price time coin days destroyed divided by the market cap or divided by the market age time Supply the market age is just defined as the amount of days since the first price data point and

the transferred price can be seen as a life toate moving average of spending Behavior now that is defining something that isn't even the thing we're trying to Define it's just making up the thing we're trying to define the terminal price which is what we're interested in in this video is equal to 21 time the transfer price okay so that is how the terminal price is created and you can see if you sort of zoom in at prior tops the the the actual top for Bitcoin occurs around where the terminal price is okay now in the

first cycle you can see it got above it a couple of times before the actual top was in and in 2013 it actually got above it a couple of times before the actual top was in you look at 2017 once it was above it the top was in and if you look at 2021 it did get AB get above it a couple of times before the top was in but the actual top occurred much lower than the terminal price you know much lower than it was and I I think that second top really threw a

lot of people off guard now one of the things that I've mentioned and you can kind of see it in this indicator as well is diminished volatility we've done a lot of videos recently where we've seen this very concept right one of those is if you go look at the P Cycle top we did a video on this where it seems like every time these moving averages cross they cross a little bit less spectacularly right I mean you know they used to cross a lot last cycle they barely crossed so if you divide the moving

averages you'll notice that in order for it to cross one it would have to go back to where it was last cycle but every cycle has seen lower and lower Peaks so you might get a situation where everyone's waiting for it to Signal by going back up to one but it never actually signals because you can see the lower highs in this metric right something to keep in mind now if you look at the stock to flow it was a similar thing right we did a whole video on this as well where if you look

at the stock to flow what you'll notice is the Orange Line the price was you know first got closer and closer to it and then now it's getting further and further away from it so if you take the deflection you can also again see the lower high structure so what I'm suggesting is the extent at which it's going above the terminal price seems to be diminishing from one cycle to another and so if you take the price of Bitcoin divided by that metric you get something that looks like this and what's really interesting is initially

we saw it going above about the same amount right you know for the first few Cycles but at least you know if you measure it from here to here to here but if you ignore that first data point then we've basically had lower highs as measured when you're looking at the the price of Bitcoin divided by that metric so for instance if we were to go over here and just simply draw a trend line through these Peaks you can see there is a chance that it doesn't actually make it up to one which is where

the terminal price would be hit so I just want people to have that in mind it doesn't mean that it can't make it up there right it doesn't mean that it can't it it very well could get back up to that level if it were to follow say the trend from the first couple of Cycles where it just kind of goes right back up to where it was so do keep that in mind it doesn't NE necessarily have to follow the diminished Peak outcome but I just want people to be aware that the diminished Peak

outcome is an outcome that should at least be on your radar right and if it were to continue like this perhaps it would get up to about 0.9 which is really interesting because if you do the P Cycle top diminish Peaks it also shows about 0.9 rather than rather than one so that's just something to keep in mind right now the terminal price according and again this is not my metric um it was created by you know you can see the creators here Chuck M and David PE right now the terminal pric is at 188k

um so just keep those you know keep those numbers in mind if um you know if if at some point in the next few months or year you're seeing the price of Bitcoin get close to that value then just keep in mind that historically there's not much more higher to go in the cycle um the other thing to remember as well is that all models are wrong some are useful and a lot of times you know when I create my own models I sort of try to assume okay it's probably going to be wrong why

is it wrong and a lot of people give a lot of models you know a bad R because they they miss something right but rather rather than look and call it a failure or a success just simply based on if it crosses a certain threshold I would encourage you to dig deeper into the metrics right you know look at it in in a different way and that's when you can sort of see these Trends emerge that otherwise you might not have noticed right taking the deflection from the price and the metric that you're looking at

the same thing goes again with what we were talking about a few days ago the pi cycle top and dividing those moving averages and then just seeing those diminished Peaks we've seen it actually many many times across a lot of indicators throughout the years right if you go look at at say the extension the natural log of the price over the 20we moving average we've seen something very similar where the extension from the 20we moving average from one cycle to another tends to diminish that doesn't mean that the price of Bitcoin can't go higher that

cycle just because it hits that top right if you look at it here you can see that it it tagged this trend line back in in March but obviously the price of Bitcoin is higher now this was one of the reasons why I said back over here that the market needed to cool off for a little while because the extension beyond the 20we moving average suggested it was time for a cool down so just keep in mind and even last cycle right last cycle you can see that it had a couple of tags on the

trend line in 2013 it had a couple of tags on the trend line so just remember that there there's a lot of times even with models that you don't necessarily like you can still find Value in them if you're willing to look so in the terminal price case I think yeah like look at this terminal price and see if it gives some validity but also look at the the trend of it you know in 2013 it crossed it pretty aggressively 2017 not as much 2021 barely crossed you know what happens if this time everyone's waiting

for it to cross and then it just barely misses it you know so just something to keep in mind we're going to keep this video relatively short if you guys like the content make sure you subscribe give the video a thumbs up and again check out the sale on into the Crypt premium at intothe crypto.com I'll see you guys next time bye