🔗Blockchain Fundamentals - Bitcoin's Stock to Flow Ratio🔗Blockchain Fundamentals - Bitcoin's Stock to Flow Ratio by Cryptorhythms
Intro
What is a stock to flow ratio and why is it important? The stock-to-flow ratio of a commodity is the amount of the asset that is held in reserves divided by the amount produced every year.
The higher the stock-to-flow ratio the reduced inflation occurs on the asset annually. Commodities with a higher stock-to-flow ratio are preferred for their scarcity.
How does it relate to Bitcoin?
Today, Bitcoin has a considerable lower stock-to-flow ratio than gold and this is where the opportunity presents itself. Bitcoin’s software has a core component cooked into the protocol in the form of an event called “the halvening”
‘The halving’ is an event that happens every 210,000 blocks or roughly every 4 years where the block reward given to the miners for securing the network gets halved. For example in 2009 the block reward was 50 BTC and today in 2019 it currently sits at 12.5 BTC with the ETA for next halving happening on Mon, 25 May 2020 which will take reward down to 6.25 BTC.
The idea that Bitcoin is the first ever truly verifiable, non-confiscatable fixed asset to exist is an extremely powerful concept. Without its strong and non-inflatable monetary policy Bitcoin would have a futile attempt of being able to disrupt gold and even accrue value in the first place.
Over the next several decades we will see Bitcoin’s stock-to-flow ratio increase significantly into never before seen water. No other asset will have anywhere near the scarcity of bitcoin.
With the incredible influx of talent coming into the industry to build out the infrastructure (custodial, ETF’s, futures) needed to allow legacy financial institutions to dip their toes in the soon smooth and regulated crypto asset waters. The next few years will be very interesting.
You might say "where will all this capital come from to propel bitcoin to new all time highs?"
1. Well asteroid mining is coming which could well eliminate golds scarcity. Your garden variety metallic asteroid could contain as much gold as half the gold humanity has ever mined!
2. Countries/economies with negative interest rate monetary policy and /or heavy quantitative easing. Their currency supply and debt just keep increasing...
3. Countries looking for ways around the USD dominated and US controlled financial systems (Iran, Russia, Venezuela, North Korea, etc)
4. There's tons more I just wanted to highlight a few.
Usage
You can compare Bitcoin with various other precious metals and commodities from the settings panel. I suggest a logarithmic scale for this indicator, other wise most assets are clumped at the bottom:
There's also plots for the forecasted (estimated) SFR ratios after the 2020 and 2024 Halvings.
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Cycleanalysis
9 Seasons Rainbow Multi TimeFrames Pattern Standard-A [9SRSAEN]The indicator discovers profitable patterns by associating Price Season of multiple timeframes.
Full Name: 9 Seasons Rainbow - Multiple TimeFrames Associated Price Wave Pattern Indicator
Version: Invite-Only STANDARD-A
This is a sibling version OF “9 Seasons Rainbow Multi TimeFrames Pattern Standard ” with some functions for developing needs, without update notice function.
Language: English
Copyright: 2019
---------- How to use the indicator ----------
Go through the manual and related ideas underneath or follow the tutorials list. Look through the profitable patterns and related cases, wait for or set alert for specific profitable pattern.
---------- Definition: 9 Seasons ----------
A life cycle of Price Wave is divided into 9 Seasons. Each time frame, from 5 minute to 1 month, has 9 seasons, Independent of each other:
Bull (Green)
Bull Pullback (Light Green): a pullback or retracement
Resistance / Overbought (Yellow): a resistance area , may become a Top, or be broken through.
Crazy Bought (Lime): Price is going up in a high volatility , could be a valid breakout, or a Bull Trap.
Neutral (White): a wandering season without direction, evolves into Bull or Bear
Bear (Red)
Bear Bounce (Light Red): Price bounces
Support / Oversold (Blue): a support area , may become a Bottom, or be broken through.
Crazy Sold (Fuchsia): Price is going down in a high volatility , could be a valid breakdown, or a Bear Trap.
---------- Some important evolution between seasons ----------
Resistance / Overbought (Yellow) -> Crazy Bought (Lime):
Bull is breaking through a resistance.
Crazy Bought (Lime) -> Resistance / Overbought (Yellow):
This normally indicates a failed breakout, Price goes back to the resistance.
Crazy Bought (Lime) -> Bull Pullback (Light Green):
This normally indicates Price has risen to a new level
Support / Oversold (Blue) -> Crazy Sold (Fuchsia):
Bear is breaking through a support.
Crazy Sold (Fuchsia) -> Support / Oversold (Blue):
This normally indicates a failed breakdown, Price recovers to the support.
Crazy Sold (Fuchsia) -> Bear Bounce (Light Red):
This normally indicates price has dropped to a new level
---------- Rainbow Ribbons for Multiple TimeFrames ----------
Each ribbon of a rainbow represents a time frame.
The uppermost ribbon represents the shortest-term time frame - current time period of the chart, which is the time frame for trading.
The lowermost ribbon represent longest-term time frame, which work as environment, together with the other medium-term and long-term time frames.
The difference between two frames is 1.4142 fold (square root of 2), if level 1 is 15 minute, level 2 is 15 minute * (square root of 2) .
Examples of time frames in a rainbow:
For STANDARD in 15M: 15M - 21M - 30M - 42M - 60M(1H) - 85M - 120M(2H) - 170M
For PRO in 15M: 15M - 21M - 30M - 42M - 60M(1H) - 85M - 120M(2H) - 170M - 240M(4H) - 339M - 480M(8H) - 679M
---------- Trading Methods ----------
How to open a Long position?
When a profitable Long pattern appears, open small position first based on signal on shortest-term time frame; after retesting and confirming the support, open 2nd position; when it breaks through the resistance, pullbacks and confirms the breakout, open 3rd position.
How to exit a Long position?
Lift the Stop to a confirmed higher low, so that to take advantages of the bull run as possible.
How to open a Short position?
When a profitable Short pattern appears, open small position first based on signal on shortest-term time frame; after retesting and confirming the resistance, open 2nd position; when it breaks through the support, bounces and confirms the breakdown, add 3rd position.
How to exit a Short position?
Lower the Stop to a confirmed lower high, so that to take advantages of the bear run as possible.
---------- Versions Description ----------
The author reserves the right to change the features without advance notice.
PRO:
Invite-Only, with the following advanced features:
12 Ribbons Rainbow displays 9 Seasons of 12 time frames on a chart.
Advanced alert sets allows set alerts on short-term, medium-term, and long-term time frames.
Capability to input different trading instrument to compare with the current ticker.
Full time periods access allows apply it to broadest time periods, from 1 minute to 1 week (if history data is enough)
More new features in updates.
STANDARD:
Invite-Only, with the following advanced features:
8 Ribbons Rainbow displays 9 Seasons of 8 time frames on a chart.
Advanced alert sets allows set alerts on upper and lower frames.
Broad time periods access allows apply it to the most popular time periods, from 15 minute to 1 week (if history data is enough)
More new features in updates.
DEMO:
DEMO version is for trial purpose, having most of the features.
It is applicable to a list of trading instruments and specific time periods (1 hour to 1 day), which may change later without advance notice.
---------- Access to Indicators ----------
Please use DEMO version for Trial
Asking access to Invite-Only PRO and STANDARD versions:
9seasonsrainbowindicator.blogspot.com
Or contact the author.
---------- Install Invite Only: STANDARD & PRO Version----------
Ask access to STANDARD or PRO version
Open the chart -> Indicators (On the Top) -> Invite-Only Scripts (2nd button of the left bar)
Like/Favorite the indicator
Click to install on the chart
---------- About Loading Time ----------
It may take up to 2 minutes for your browser to load a new setting, depending on the your computer and network speed.
---------- List of the author's Indicators ----------
www.tradingview.com
---------- Disclaimer ----------
By using or requesting access to the indicator, you acknowledge that you have read and accepted that the indicator and any related content, including but not limited to: user manual, tutorials, ideas, videos, chats, emails, blog, are for the purpose of trading strategies studying and paper trading.
If a customer or user uses the indicator or related content mentioned above for live trading or investment, she/he should take all risks and be responsible for her/his own trading and investment activities.
---------- Updates ----------
The latest updates override the previous description.
To activate a update: Close the browser, Reopen the chart and apply the indicator.
CCI Cycle (Modified Schaff Trend Cycle)This is a modified Schaff Trend Cycle (STC), which is designed to provide quicker entries and exits.
I've been a huge fan of the STC for a long time, but being based on the MACD means its signals often lag by a bar or two (especially in fast moving markets). All I've done here is take the base STC script (all credit to user @LazyBear), and change the source to a modified CCI.
The CCI Cycle provides more timely entries and exits, often by 1-2 bars. The flip side of the increased responsiveness is a prevalence for more false signals (a perfect example is the 17th August on the above chart). It's the nature of the beast! Still, I've been using this for a few months now and it's (in my opinion) an upgrade on the standard STC.
As always, you will need to pair this with another indicator or method of technical analysis to provide a trade bias, as the CCI Cycle (and STC) aren't designed to trade every signal. In my experience, either divergence identification, or using one or more moving averages works particularly well.
The indicator is also MTF capable, so you can get some interesting results from that.
Any queries let me know.
DD
Ehlers Stochastic Cyber CycleEhlers Stochastic Cyber Cycle indicator script.
This indicator was originally developed by John F. Ehlers (see his book `Cybernetic Analysis for Stocks and Futures`, Chapter 8: `Stochasticization and Fisherization of Indicators`).
Ehlers Cyber CycleEhlers Cyber Cycle indicator script.
This indicator was originally developed by John F. Ehlers (see his book `Cybernetic Analysis for Stocks and Futures`, Chapter 4: `Trading the Cycle`).