The yellow wavy line in the figure represents the "nominal inflation rate", which is the daily issuance of $BTC to miners (we can assume this is the continuous selling pressure in the market). The green wavy line is the "LTH market inflation rate" calculated by calculating the daily change in the supply of long-term holders.
When the green and yellow lines are glued together, it means that the accumulation speed of LTH is close to the speed of miners' issuance. When the green line has a higher value, it means that the departure of LTH has increased the seller pressure (LTH balance has decreased), while the lower value indicates that the accumulation speed of LTH is higher than the speed of issuance to miners.
Through observation we can find the following key points:
1. In the first two cycles, the green line and the yellow line mostly adhered to each other before and after the halving day.
2. After the halving, the green line will gradually be higher than the yellow line, indicating that the inflation rate of the LTH market is rising relative to the nominal inflation rate, and the seller pressure is increasing. This is often accompanied by the market entering the final peak stage.
3. At the peak of the real bull market, the LTH market inflation rate also peaked and was much higher than the nominal inflation rate, indicating that the departure of long-term holders sharply increased the seller pressure in the market (that is, the inflation rate of the available supply was very high). This also eventually led to oversupply and triggered a bear market.
Well, we have just gone through the halving, and the green line and the yellow line are glued together, similar to the previous two cycles. From the data, LTH will experience a period of accumulation before breaking upward. When the inflation rate reaches its peak (much higher than the nominal inflation rate), it is the real top of this cycle. Obviously, it is not now.
