Why does on-chain volume show an overly bearish picture of the 2018-2019 Bitcoin market?
Let's delve into a mystery of this 2018-2019 bear market that David Puell and Murad Mahmudov and I have been exploring for months... Why does on-chain volume look so bearish while many of our other (to be published) metrics tell a more positive story?
Up to now, whenever you saw a chart of mine that had on-chain volume as an ingredient, the volume estimates came from Blockchain.com's API feed (BCHAIN). This was the first and most reliable source until recently.
The Bitcoin Network needs sufficient on-chain volume in order to fuel a bull market. BCHAIN volume estimates painted a very grim picture of the market, it was saying "lots more bear to come".
![](https://woobull.com/content/images/2019/04/image-4.png)
If we wanted to double check BCHAIN volume estimates, how could we do this?
When you think about it, coins that are younger than 1 day of HODL means they have shifted in the last 24hrs. This gives us an alternative estimate to 24hr on-chain volume.
When I did this**, it suggested a drift in the BCHAIN volume estimates since 2017 to the low side. This would point towards an overly bearish picture from BCHAIN.
![](https://woobull.com/content/images/2019/04/image-1.png)
In fact, 1d HODL "volume" pointed to the bottom being in for quite some time. The accumulation band having already formed.
![](https://woobull.com/content/images/2019/04/image-2.png)
Fortunately we now have a completely new on-chain volume estimate from Coinmetrics, currently available in their CM Pro suite***.
Here's how they stack up...
![](https://woobull.com/content/images/2019/04/image-3.png)
Both my 1 day HODL, and the new CM Pro volume estimates suggests the accumulation bottom is now well under way.
** 1-day HODL coin volume is derived by multiplying Unchain Capital's 1d HODL Wave chart with the circulating supply of Bitcoin.
*** CM Pro volume estimates are published under permission from Coinmetrics.