On February 9, the American professional baseball team based in Washington, D.C., the Washington Nationals, announced the team has partnered with Terra, the open-source blockchain platform and decentralized autonomous organization (DAO). The Washington Nationals detail that the team is a “leading innovator” and is “consistently introducing new technologies to enhance the fan experience.” Washington Nationals Ink Long-Term Deal With Terra Major League Baseball (MLB) team the Washington Nationals has partnered with the blockchain platform and DAO Terra, according to an announcement published by the team on Wednesday. The deal with Terra follows a slew of sports-related deals with crypto firms, but the MLB team will be the first to partner with an open-source blockchain project. In addition to the partnership, the algorithmic stablecoin UST that’s issued on the Terra blockchain will be “accepted as a payment method at Nationals Park as early as next season.” “The Nationals continue t...
The supply shock valuation model delivers an extra reason to be long-term bullish on upward price movement.
Bitcoin (BTC) should cost at least $55,000 per coin according to one metric measuring its so-called “supply shock.”
In a tweet on Sep. 5, analyst Willy Woo highlighted what he added is a “conservative” price estimate for BTC/USD.
Bitcoin price plays catch-up with metrics
While Bitcoin has still not established $50,000 as firm support, on-chain metrics have been much more firmly bullish for some time.
Now, the so-called “supply shock valuation model” has joined them, giving a conservative price estimate of $55,000.
Supply shock is simply the unavailable BTC supply divided by the available BTC supply. This goes deeper than at first glance, as Woo uses it to effectively “wave a magic wand and gauge the intent of investors before the bids and offers are even placed.”
“In this view of demand and supply, an investor who has no intention to sell is on the demand side while an investor who is willing to sell is on the supply side,” he explained in a blog post last month.
The valuation model additionally uses an algorithm to compare similar supply and demand situations to now, thus producing a fair price estimate.
“It's conservative as one of the SS metrics, exchange SS, is now above all-time-high so no look-back is possible,” Woo acknowledged in the tweet, referring to the ratio of coins in cold storage compared to on exchanges being at record levels.
The accompanying chart captures when BTC price moved with and without any shifts in investor intent.
$50,000 first hurdle for bulls
Bitcoin supply shock is an oft-used phrase in the current market thanks to 2021 being the year after a block subsidy halving event.
Related: More like ‘shock-to-flow’ — BTC price hits bull trigger as mystery buyers scoop up supply
With miners now unlocking just 6.25 BTC per block, so far, Bitcoin has behaved broadly similarly to previous post-halving years — 2013 and 2017.
The conservative $55,000 minimum target nonetheless remains above another set of monthly close minimums from analyst PlanB, who guesses that September will have a minimum monthly close of $43,000.
Thereafter, however, upside resumes in earnest, with Bitcoin closing out 2021 on at least $135,000.
At the time of writing, BTC/USD traded at $50,200, having stayed in a tight range throughout the weekend.
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